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Unlevered Firms
Companies that operate without the use of borrowed money or financial leverage.
M&M Proposition II
A theory proposing that the cost of equity for a leveraged firm increases linearly with its level of debt, holding the cost of debt constant.
Cost of Equity
The return a company requires to decide if an investment meets capital return requirements and is used in calculating the weighted average cost of capital.
Debt/Equity Ratio
A financial ratio indicating the relative proportion of shareholders' equity and debt used to finance a company's assets, often used to gauge financial health and risk.
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