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Question 11 Which of these statements is fot correct about Modigliani and Miller's original (1958) model (no taxes, riskless debt) (a) The firm's value is
Question 11 Which of these statements is fot correct about Modigliani and Miller's original (1958) model (no taxes, riskless debt) (a) The firm's value is unaffected by the capital structure decision (b) The beta of the equity for a firm with leverage will be higher than the beta of an identical firm without leverage (c) If we change the assumption and make the debt risky, then the firm's value will be dependent on capital structure (d) The higher the D/E ratio, the higher the required return of the equity holders (e) The overall risk of the company (debt and equity) is not affected by the capital structure of the firm
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