Which one of these statements corresponds to MM proposition I without taxes?
A) Debt interest has no effect on either equity income or firm value.
B) Debt interest reduces equity income and increases firm value.
C) Debt interest reduces equity income but does not affect firm value.
D) The value of a firm increases as its debt-equity ratio increases.

Question

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The Answer of Which one of these statements corresponds to MM proposition I without taxes?
A) Debt interest has no effect on either equity income or firm value.
B) Debt interest reduces equity income and increases firm value.
C) Debt interest reduces equity income but does not affect firm value.
D) The value of a firm increases as its debt-equity ratio increases.

Which One of These Statements Corresponds to MM Proposition I