A Limitation of the MM Analysis in the Absence of Taxes

question 55

Multiple Choice

A limitation of the MM analysis in the absence of taxes is that:

• A)risky debt is not considered.
• B)the possibility of default on debt is not considered.
• C)there is no cost associated with default on debt.
• D)only risk-free debt is considered.

---

Definitions:

Conditional Jurisdiction

A legal principle where a court has the authority to hear a case based on certain conditions being met.

Subject-Matter Jurisdiction

The power of a court over the type of case presented to it.

In Rem

A legal term referring to actions or judgments that apply to a piece of property directly, rather than against a person.

Sliding-Scale Standard

A method of adjusting the level of strictness or leniency in the application of a rule or standard based on specific conditions or factors.