The concept of homemade leverage is most associated with:
A) M&M Proposition I with no tax.
B) M&M Proposition II with no tax.
C) M&M Proposition I with tax.
D) M&M Proposition II with tax.
E) Static theory proposition.

Question

Quizplus · Accepted Answer

Homemade leverage is associated with M&M Proposition I with no tax, which states that in a perfect market, the value of a firm is unaffected by its capital structure. Investors can create their own leverage by borrowing or lending on their own account.

The Concept of Homemade Leverage Is Most Associated With