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

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

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

The manager of a firm should change the capital structure if and only if Blank______.Multiple choice question.it benefits managementthe value of the debt exceeds the value of the equitythe change will increase the value of the firmthe change will decrease the value of the firm

n the absence of taxes, the value of a firm is the same with debt financing as it is with equity financing because Blank______.Multiple select question.the asset to be financed is the samedebt financing is actually better than equity financingequity financing is actually better than debt financingMM demonstrated that debt financing is neither better nor worse than equity financing in the absence of taxes