Modigliani and Miller (M&M) Proposition II states: A) the cost of equ
Modigliani and Miller (M&M) Proposition II states:
A) the cost of equity does not change when a firm takes on a greater proportion of debt.
B) the cost of equity increases when a firm takes on a greater proportion of debt.
C) the cost of debt increases when a firm takes on a greater proportion of equity.
D) the cost of equity decreases when a firm takes on a greater proportion of debt.
ANSWER
B
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