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Which of the following is correct about Modigliani and Miller's theory with taxes and financial distress? a) All firms will be financed only with debt

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Which of the following is correct about Modigliani and Miller's theory with taxes and financial distress? a) All firms will be financed only with debt O b) The main conclusion of M&M without taxes, the irrelevance of the capital structure to the firm's value, does not hold c) Firms with higher profitability are likely to use less debt d) The cost of equity decreases with leverage O e) None of the above

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