MM Proposition II shows that Blank______.Multiple choice question.the market value of the firm is unaffected by its capital structurethere is no risk involved with leverage when there are no corporate taxesthe cost of equity rises with leverageequity is less expensive than debt

Under the MM propositions with no taxes, managers cannot change the value of the firm by repackaging its securities because Blank______.Multiple select question.as debt is added, the equity becomes more riskythe overall cost of capital cannot be reducedcapital structures are fixeddebt is not cheaper than equity

Under MM Proposition II, a firm's cost of equity capital is Blank______ related to the firm's debt-equity ratio provided the cost of capital for an all-equity firm exceeds the cost of debt.Multiple choice question.negativelynotpositivelyindirectly

With no taxes, MM showed Blank______.Multiple choice question.capital structure is importantcapital structure does not mattermore debt increases valuedebt financing is worse than equity financing

Whenever the cost of capital for an all-equity firm is greater than the cost of debt, the cost of equity Blank______.Multiple choice question.is unaffected by leverageincreases with leveragedecreases with leverage

The value of a levered firm in MM Proposition I with corporate taxes equals the value of an all-equity firm Blank______.Multiple choice question.times the tax rate times the value of debttimes the tax rate plus the value of debtplus the tax rate times the value of debtminus the tax rate times the value of debt