The essence of Modigliani and Miller’s irrelevance theory is that
A) increasing operating leverage will maximize EPS.
B) shareholders prefer to invest in firms with a high degree of financial leverage.
C) altering a firm’s capital structure will increase its value.
D) utilizing more debt will increase a firm’s value.
E) the value of the firm will not be changed by how assets are distributed between bondholders and stockholders.
ANSWER
E
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