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lozanna [386]
3 years ago
15

According to Modigliani and Miller capital structure theory: Group of answer choices the cost of equity capital increases as a f

irm take on more debt financing. the value of a levered firm decreases relative to the value of an unlevered firm as corporate tax rates increase. the value of the firm is independent of capital structure in a world with perfect capital markets and corporate taxes. firms should employ as close to 100% debt financing as possible in a world with perfect capital markets and corporate taxes only. firms should employ 100% equity financing in a world with perfect capital markets and no taxes
Business
1 answer:
professor190 [17]3 years ago
7 0

Answer:

the value of the firm is independent of capital structure in a world with perfect capital markets and corporate taxes.

Explanation:

The Modigliani-Miller theorem refers to a theory where the capital structure does not have any impact on it. It is totally independent

So as per the given options, third option is correct as the capital structure i.e. combination of the equity and the debt should have no impact under this theory

Therefore the third option is correct

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Answer:

C) The conditions are met.

Explanation:

A conditional promise is a promise that depends on the occurrence of one or more future events (conditions) before it becomes an obligation for the promisor. In order for the promise to be recognized by the not-for-profit entity, the conditions established must be met, therefore the conditional promise becomes an unconditional promise.

For example, it the promisor promises to give the entity $100,000 in case he sells his house, then the promise will be recognized when the promisor's house is sold.

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4 years ago
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