In M&M Proposition II the cost of equity changes with changes in the a
In M&M Proposition II the cost of equity changes with changes in the amount of debt financing. Which of the following is the correct formula for Proposition II?
A) Ke = Ku + (Ku – Kd) / ( )
B) Ke = Ku + (Ku – Kd) ( )
C) Ke = Ku + (Ku + Kd) ( )
D) Ke = Ku + (Ku + Kd) / ( )
ANSWER
B
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