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According to Modigliani and Miller, in a world with taxes, the cost of equity will always rise with increased gearing because A. the interest on
According to Modigliani and Miller, in a world with taxes, the cost of equity will always rise with increased gearing because
A. | the interest on debt is allowable against tax | |
B. | the tax shield on debt increases the value of the shareholders' equity | |
C. | the firm is more likely to go bankrupt | |
D. | the return to shareholders becomes more variabl |
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