Which of the following statements concerning the MM extension with growth is INCORRECT?
A) The value of a growing tax shield is greater than the value of a constant tax shield.
B) For a given D/E, the levered cost of equity is greater than the levered cost of equity under MM's original (with tax) assumptions.
C) For a given D/E, the WACC is less than the WACC under MM's original (with tax) assumptions.
D) The total value of the firm increases with the amount of debt.
Correct Answer:
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