The Modigliani-Miller Proposition I Without Taxes States

question 41

Multiple Choice

The Modigliani-Miller Proposition I without taxes states:

• A) A firm cannot change the total value of its outstanding securities by changing its capital structure proportions.
• B) When new projects are added to the firm the firm value is the sum of the old value plus the new.
• C) Managers can make correct corporate decisions that will satisfy all shareholders if they select projects that maximize value.
• D) the determination of value must consider the timing and risk of the cashflows.

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