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different values. According to M&M Virtually identical except for their capital structure are selling in the market at b. a. One will be at greater

different values. According to M&M Virtually identical except for their capital structure are selling in the market at b. a. One will be at greater risk of bankruptcy The firm will greater financial leverage will have a higher value b. c. This proves the markets cannot be efficient d. This will not continue because arbitrage will eventually cause the firms to sell at the same value 12. In calculating the NPV using the flow-to-equity approach the discount rate is the a. All equity cost of capital Cost of equity for the

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