Which of the Following Statements Concerning the MM Extension with Growth

question 17

Multiple Choice

Which of the following statements concerning the MM extension with growth is NOT CORRECT?

• A) The tax shields should be discounted at the unlevered cost of equity.
• B) The value of a growing tax shield is greater than the value of a constant tax shield.
• C) For a given D/S, the levered cost of equity is greater than the levered cost of equity under MM's original (with tax) assumptions.
• D) For a given D/S, the WACC is greater than the WACC under MM's original (with tax) assumptions.
• E) The total value of the firm is independent of the amount of debt it uses.

---

Definitions:

Medial Region

Pertaining to or situated in the middle; the central part of an organism or structure.

Trans Face

In the Golgi apparatus, it refers to the side where modified proteins and lipids are sorted and packed for transport to their destinations.

Golgi Complex

An organelle in cells that modifies, sorts, and packages proteins and lipids for storage or transport out of the cell.

Ribosomes

Cell organelles that function as the site of protein synthesis, translating messenger RNA into proteins.