Question
If the corporate tax rate is zero and there is no default risk, which of the following is NOT true? A. Cost of equity does
If the corporate tax rate is zero and there is no default risk, which of the following is NOT true?
A. Cost of equity does not depend on capital structure.
B. All of the statements are true.
C. Cost of equity increases with financial leverage
D. Cost of capital does not depend on capital structure.
E. Cost of riskless debt does not depend on capital structure.
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Handbook Of The Economics Of Finance
Authors: George M. Constantinides, Milton Harris, Rene M. Stulz
1st Edition
044459406X, 978-0444594068
