Which one of these proposes that the value of a levered firm exceeds the value of an unlevered firm by the present value of the tax shield?
A)MM Proposition I,with and without taxes
B)MM Proposition I,with tax
C)MM Proposition II,with tax
D)MM Proposition I,without tax
E)MM Proposition II,without tax

Question

Quizplus · Accepted Answer

MM Proposition I with tax proposes that the value of a levered firm exceeds the value of an unlevered firm by the present value of the tax shield. MM Proposition I without tax and MM Proposition II with and without tax do not address the impact of the tax shield on the value of a levered firm.

Which One of These Proposes That the Value of a Levered