Modigliani-Miller (MM) Formula for After-Tax Discount Rate Is Given By

question 3

Multiple Choice

Modigliani-Miller (MM) formula for after-tax discount rate is given by:

• A) rMM = r(1 - TCD/V)
• B) rMM = r(1 + TCD/V)
• C) rMM = r/(1 - TCD/V)
• D) None of the above

---

Definitions:

Service Business

A business that provides intangible products or services to consumers instead of selling physical goods.

Transformation Processes

The sequences of actions or operations that convert inputs into finished goods or services, altering the state, composition, or condition.

Add Value

The process of increasing the worth of a product or service by improving it or adding features to it.

Inputs

The resources, raw materials, labor, and energy used in the production process to create goods or services.