MM's proposition II without taxes states that the:
A) expected return on equity increases as financial leverage increases.
B) expected return on assets decreases as expected return on debt decreases.
C) firm's capital structure is irrelevant to the firm's overall value.
D) greater the proportion of equity, the higher the expected return on debt.

Question

Quizplus · Accepted Answer

The Answer of MM's proposition II without taxes states that the:
A) expected return on equity increases as financial leverage increases.
B) expected return on assets decreases as expected return on debt decreases.
C) firm's capital structure is irrelevant to the firm's overall value.
D) greater the proportion of equity, the higher the expected return on debt.

MM's Proposition II Without Taxes States That The