The Theory That a Change in the Capital Structure Weights

question 274

Multiple Choice

The theory that a change in the capital structure weights is exactly offset by the change in the cost of equity is known as:

• A) Homemade leverage.
• B) Financial leverage.
• C) The targeted capital structure theory.
• D) M&M Proposition I.
• E) M&M Proposition II.

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Definitions:

Operating Departments

Operating Departments are the units or divisions within an organization responsible for carrying out its primary business activities.