A Key Assumption of MMs Proposition I (No Taxes) Is

question 52

Multiple Choice

A key assumption of MMs Proposition I (no taxes) is:

• A) that financial leverage increases risk.
• B) that individuals can borrow on their own account at rates less than the firm.
• C) that individuals must be able to borrow on their own account at rates equal to the firm.
• D) managers are acting to maximize the value of the firm.

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