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Modigliani and Miller showed that under some very strict assumptions, one of which is no taxes, that the value of the unlevered firm is equal

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Modigliani and Miller showed that under some very strict assumptions, one of which is no taxes, that the value of the unlevered firm is equal to the value of the levered firm. That is equivalent to which of the following? O The weighted average cost of capital (WACC) for the firm will increase as the firm adds debt. O The expected return on equity for an unlevered firm (ro) will be equal to a firm's weighted average cost of capital (WACC) for a firm with identical assets that uses leverage to finance its assets. O The expected return on equity for an unlevered firm (ro) will be equal to the firm's cost of debt. O None of the above

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