Which One of the Following Statements Matches M&M Proposition I

question 93

Multiple Choice

Which one of the following statements matches M&M Proposition I without taxes?

• A)The cost of equity capital has a positive linear relationship with a firm's capital structure.
• B)The dividends paid by a firm determine the firm's value.
• C)The cost of equity capital varies in response to changes in a firm's capital structure.
• D)The value of a firm is independent of the firm's capital structure.
• E)The value of a firm is dependent on the firm's capital structure.

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