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Which of the following predicts the existence of an optimum capital structure for an individual firm that is financed with both debt and equity? A.

Which of the following predicts the existence of an optimum capital structure for an individual firm that is financed with both debt and equity?

A. Modigliani-Miller Proposition I (no taxes)

B. Modigliani-Miller Proposition II (with corporate taxes)

C. Pecking-Order Theory of Capital Structure

D. Two of the above

E. None of the above

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