Which of the Following Represent Limitations of Indifference Analysis

question 43

Multiple Choice

Which of the following represent limitations of indifference analysis?
I.Indifference analysis does not consider how equity investors may react to the increased risk due to increased leverage.
II.Indifference analysis fails to account for corporate taxes.
III.Indifference analysis ignores sinking fund payments.

• A)I only
• B)I and II
• C)I and III
• D)I, II, and III

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