Which statement correctly describes proposition I of Modigliani and Miller?
A) The value of the firm is independent of its capital structure.
B) If there is no default risk,firms should exclusively use debt to finance projects.
C) If there is no default risk,firms should exclusively use equity to finance projects.
D) The value of the firm's tax shields depends solely on the amount of debt issued.
Correct Answer:
Verified
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A)
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Exhibit 12-1
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