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Tim and Sally run a gyro shop in a tax-free development zone. Tim believes that their company should target a debt-to-equity ratio of 1

Tim and Sally run a gyro shop in a tax-free development zone. Tim believes that their company should target a debt-to-equity ratio of 1 to maximize the firm's value. Sally believes the capital structure is unrelated to the firm's value. Sally's view is supported by: Multiple Choice Law of One Price M&M Proposition I Capital Asset Pring Model Proposition II

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