Under the MM 'law of conservation of value',a company's cost of capital:

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According to the MM law of conservation of value, the cost of capital of a company remains unchanged as the proportional amount of debt increases, which means the company's value and the cost of equity will also remain constant. This assumption is based on the assumption of perfect markets and no taxes. However, in the real world, various factors such as taxes, bankruptcy costs, and agency costs may affect a company's cost of capital.

Under the MM 'Law of Conservation of Value',a Company's Cost