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Which of the following statements regarding Modigliani and Miller (MM)s propositions is most accurate? A. Firm value is maximized with a capital structure consisting of
Which of the following statements regarding Modigliani and Miller (MM)s propositions is most accurate?
A. | Firm value is maximized with a capital structure consisting of 100% equity |
B. | The required rate of return of equity increases as the firm increases its financial leverage |
C. | The use of debt financing increases the firms earnings volatility |
D. | It does not matter which capital structure firm choose because capital structure is irrelevant in terms of firm value, with or without taxes. |
E. | All of above are wrong |
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