Select all that applyUnder MM with no taxes, as debt is Blank______ to capital structure, the cost of equity Blank______.Multiple select question.removed; increasesadded; increasesadded; decreasesremoved; decreases

As debt Blank______, bankruptcy costs Blank______.Multiple select question.increases; increasedecreases; increasedeceases; decreaseincreases; decrease

Select all that applyUnder 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 riskycapital structures are fixedthe overall cost of capital cannot be reduceddebt is not cheaper than equity

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.decreases with leverageincreases with leverageis unaffected by leverage

Firm value initially increases when the proportion of debt in the capital structure increases due to the Blank______.Multiple choice question.lower dividend paymentsdebt tax shieldhigher dividend paymentslower interest expenses