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MM Proposition II Without Taxes Implies That the Required Return

Question 1

Multiple Choice

MM Proposition II without taxes implies that the required return on equity is:


A) a result of homemade leverage.
B) inversely related to the firm's debt-to-equity ratio.
C) a linear function of the firm's debt-to-equity ratio.
D) independent of the firm's capital structure.
E) a linear function of the market's rate of interest.

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