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Assume that you have identified two companies that are virtually identical in all aspects except for their capital structure. What should happen to these companies

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Assume that you have identified two companies that are virtually identical in all aspects except for their capital structure. What should happen to these companies according to the Modigliani and Miller (no tax) theorem? A. One will be at greater risk of default B. The more leveraged firm will be more valuable C. The less leveraged firm will be more valuable D. This situation will not persist for long because arbitrage will eventually cause the firms to sell at the same value

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