With the Inclusion of Taxes,MM I Is Incorrect and the Capital

question 93

Multiple Choice

With the inclusion of taxes,MM I is incorrect and the capital structure of the firm can be important due to:

• A) lower tax rates on dividends than on debt.
• B) higher tax rates on retained earnings than on debt.
• C) lower tax liability due to interest deductibility.
• D) higher operating income from less dividends.

---

Definitions:

Premature Infants

Babies born before 37 weeks of gestation, often requiring special medical care due to underdeveloped organs and body systems.

Anoxia

A condition characterized by an absence of oxygen supply to an organ or tissue, which can result in damage or dysfunction.

Hypoxia

A condition in which the body or a region of the body is deprived of adequate oxygen supply at the tissue level.

Oxygen Deprivation

A state where there is an insufficient supply of oxygen to the body that can lead to critical health issues or damage to organs.