Which of the Following Statements Are Correct in Relation to MM

question 26

Multiple Choice

Which of the following statements are correct in relation to MM Proposition II with no taxes? I.The return on assets is equal to the weighted average cost of capital.
II) Financial risk is determined by the debt-equity ratio.
III) Financial risk determines the return on assets.
IV) The cost of equity declines when the amount of leverage used by a firm rises.

• A)I and III only.
• B)II and IV only.
• C)I and II only.
• D)III and IV only.
• E)I and IV only.

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Definitions:

Split Button

A GUI element that combines a button and a dropdown list, giving the user the ability to either click the button for a default action or use the dropdown to select a variant of the action.

Switch Button

A control element in a graphical user interface that allows the user to toggle between two or more choices.

Taskbar

A bar visible on a computer desktop that shows running applications and provides shortcuts to system and program functions.

Center Button

Typically refers to a central button on a device or application that is used for navigating or selecting options.