Under the MM Theorem,capital Structure Will Not Change the Total

question 44

Multiple Choice

Under the MM theorem,capital structure will not change the total value of a firm because:

• A)EPS is not affected by leverage.
• B)two firms with the same assets but different capital structures are not considered perfect substitutes.
• C)dividend policy is irrelevant.
• D)perfect substitutes should not sell at different prices in the same market.

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Definitions:

Ninth Month

The final month of human pregnancy, during which significant fetal development concludes and preparations for birth intensify.

Gestation

The period of time during which an embryo develops within the uterus until birth; in humans, this process takes approximately 40 weeks from the last menstrual period.

Fetus

A developing human from roughly eight weeks after conception until the time of birth.

Birth Process

The series of events and stages that lead to the delivery of a baby, from the onset of labor to the delivery.