M&M Proposition I with Tax States That the Value of a Levered

question 359

Multiple Choice

M&M Proposition I with tax states that the value of a levered firm increases as the:

• A) Level of debt decreases.
• B) Tax rate of the firm decreases.
• C) Debt-equity ratio increases.
• D) Unlevered value of the firm decreases.
• E) Inflation rate increases.

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