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Memphic Memphic
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6 years ago
Which of the following statements is FALSE?
A) Leverage decreases the risk of the equity of a firm.
B) Because the cash flows of the debt and equity sum to the cash flows of the project, by the Law of One Price the combined values of debt and equity must be equal to the cash flows of the project.
C) Franco Modigliani and Merton Miller argued that with perfect capital markets, the total value of a firm should not depend on its capital structure.
D) It is inappropriate to discount the cash flows of levered equity at the same discount rate that we use for unlevered equity.
Textbook 
Corporate Finance: The Core

Corporate Finance: The Core


Edition: 4th
Authors:
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pbrown223pbrown223
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6 years ago
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Memphic Author
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6 years ago
I appreciate what you did here, answered it right Smiling Face with Open Mouth
fxinternational
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Yesterday
Smart ... Thanks!
54321abs
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2 hours ago
this is exactly what I needed
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