In relation to M&M Proposition II with no taxes, financial risk is determined by the debt-equity ratio.

Name: In relation to M&M Proposition II with no taxes, financial risk is determined by the debt-equity ratio.
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M&M Proposition II without taxes states that a company's cost of equity capital is a linear function of the company's debt-equity ratio, reflecting the increased financial risk taken on by equity holders as more debt is used.

In Relation to M&M Proposition II with No Taxes, Financial