A Key Assumption of MM's Proposition I Without Taxes Is

question 39

Multiple Choice

A key assumption of MM's Proposition I without 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.
• E)All of the above.

---

Definitions:

Machiavellianism

A philosophy that describes people who manipulate others and use unethical practices for personal gain.

Manipulated

Being controlled or influenced in an unfair or dishonest way.

High Levels

Refers to a state or condition of exceeding average or normal ranges, which can apply to various contexts such as performance, intensity, or degree.

Decision Making

The action or process of identifying a strategy to resolve problems.