Which of the following is NOT a conclusion drawn from M&M’s Propositio

Which of the following is NOT a conclusion drawn from M&M’s Propositions 1 and 2?

A) Firm value is determined by the left hand of the balance sheet, the firm’s assets, and the cash flow generated by them.
B) A firm can change its market value by splitting its cash flows into different streams.
C) Shareholder’s required return rises with leverage.
D) The WACC does not change as capital structure change.
E) The WACC is determined by the riskiness of the company’s business (assets).

ANSWER

B