RATES OF RETURN [Percent 20 18 16 14 12 Equity Debt 0.5 1.0 1,5 2.0 DEBT-EQUITY DVE RATIO From what you see on the graph, which of the following assumptions is consistent with the graph? O The firm's debt is risk free. O Excessive financial leverage causes debt to become more risky than equity. O The firm's debt has default risk. O The firm's expected return on assets depends on its financial leverage. Based on the assumption that a firm operates in a tax-free world, Modigliani and Miller made an important osition about the value of a levered portfolio or company (V) and an unlevered portfolio or firm (Vu). Which of the #blowing equations best represents the conclusion from the MM: No Tax theory? MacBook Air