Solution-Model of capital structure

Model of capital structure

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Reference no: EM132439119

Which of the following is an assumption in the MM II (Miller Modigliani, 1963) model of Capital Structure:

a) There are no taxes.

b) There are brokerage (transaction) costs.

c) Investors and corporations cannot borrow and lend at the same rate.

d) Cost of equity does not change when capital structure changes.

e) There are no bankruptcy costs.

[NOTE:- Please read each option carefully as there are very subtle differences in wording. I have received many wrong answers due to people not paying attention. Thank you in advance.]

Reference no: EM132439119

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Model of capital structure

Reference no: EM132439119

Reference no: EM132439119

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