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When Modigliani and Miller Revised Their Original Model to Include

Question 68

Multiple Choice

When Modigliani and Miller revised their original model to include taxes,they concluded that


A) firms should reduce their degree of financial leverage.
B) tax avoidance does not alter a firm's value.
C) tax increases lower a firm's value.
D) firms should use only debt in their capital structure.
E) taxes also have no bearing on the capital structure decision.

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