MM Proposition I with Taxes Is Based on the Concept

question 44

Multiple Choice

MM Proposition I with taxes is based on the concept that the:

• A)optimal capital structure is the one that is totally financed with equity.
• B)capital structure of the firm does not matter because investors can use homemade leverage.
• C)firm is better off with debt based on the weighted average cost of capital.
• D)presence of taxes causes debt to be valuable to a firm.
• E)cost of equity increases as the debt-equity ratio of a firm increases.

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Definitions:

Public Cloud

A computing service model where resources, such as servers and storage, are owned and operated by a third-party provider and delivered over the internet, making them available to the general public.

Google Drive

A cloud-based storage service provided by Google that allows users to save files online and access them from any smartphone, tablet, or computer.

Customer Manages

In a business context, it refers to situations where customers have control over certain decisions or aspects of service provision.

IaaS

Infrastructure as a Service, a cloud computing model that provides virtualized computing resources over the internet.