Which one of the following is an implication of M&M Proposition II, without taxe

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Which one of the following is an implication of M&M Proposition II, without taxes? Question 3 options: 1) A firm's optimal capital structure is 100 percent debt. 2) WACC is unaffected by the capital structure of a firm. 3) WACC decreases as the debt-equity ratio increases. 4) A firm's capital structure is irrelevant. 5) The risk of equity depends on both the degree of financial leverage and the riskiness of the firm's operations.
Which one of the following is an implication of M&M Proposition II, without taxes? Question 3 options: 1) A firm's optimal capital structure is 100 percent debt. 2) WACC is unaffected by the capital structure of a firm. 3) WACC decreases as the debt-equity ratio increases. 4) A firm's capital structure is irrelevant. 5) The risk of equity depends on both the degree of financial leverage and the riskiness of the firm's operations. Which one of the following is an implication of M&M Proposition II, without taxes? Question 3 options: 1) A firm's optimal capital structure is 100 percent debt. 2) WACC is unaffected by the capital structure of a firm. 3) WACC decreases as the debt-equity ratio increases. 4) A firm's capital structure is irrelevant. 5) The risk of equity depends on both the degree of financial leverage and the riskiness of the firm's operations. Which one of the following is an implication of M&M Proposition II, without taxes? Which one of the following is an implication of M&M Proposition II, without taxes? 1) A firm's optimal capital structure is 100 percent debt. 2) WACC is unaffected by the capital structure of a firm. 3) WACC decreases as the debt-equity ratio increases. 4) A firm's capital structure is irrelevant. 5) The risk of equity depends on both the degree of financial leverage and the riskiness of the firm's operations. A firm's optimal capital structure is 100 percent debt. WACC is unaffected by the capital structure of a firm. WACC decreases as the debt-equity ratio increases. A firm's capital structure is irrelevant. The risk of equity depends on both the degree of financial leverage and the riskiness of the firm's operations. 1) A firm's optimal capital structure is 100 percent debt. 2) WACC is unaffected by the capital structure of a firm. 3) WACC decreases as the debt-equity ratio increases. 4) A firm's capital structure is irrelevant. 5) The risk of equity depends on both the degree of financial leverage and the riskiness of the firm's operations.

Explanation / Answer

firm's optimal capital structure is 100 percent debt. If a firm's optimal capital structure is 100 percent debt.

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