According to the MM theory, in an economy with no taxes, no bankruptcy costs, and no other market imperfections, increase in debt equity ratio will Increase a firm's cost of equity and its WACC Increase a firm's cost of equity but decrease its WACC Increase a firm's cost of equity but leave its WACC unaffected Leave both cost of equity and WACC unaffected

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According to the MM theory, in an economy with no taxes, no bankruptcy costs, and no other market imperfections, increase in debt/equity ratio will Increase

"According to the MM theory, in an economy with no taxes, no bankruptcy costs, and no other market imperfections, increase in debt/equity ratio will"

		Increase a firm's cost of equity and its WACC
		Increase a firm's cost of equity but decrease its WACC
		Increase a firm's cost of equity but leave its WACC unaffected
		Leave both cost of equity and WACC unaffected

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