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Explain Why you agree or disagree with the following statements. The answer should not be more than 3 sentences. Be specific in your answer and
Explain Why you agree or disagree with the following statements. The answer should not be more than 3 sentences. Be specific in your answer and write only the most relevant explanations (Total Marks 6, Each 1.5).
- Treasury bills are riskier than corporate bonds
- A firm should select the capital structure that is fully unlevered.
- Leveraged beta represents fundamental financial risk.
- MM Proposition I with no tax supports the argument that a firm should borrow money to the point where the tax benefit from debt is equal to the cost of the increased probability of financial distress.
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