Under perfect capital markets,which of the following statements is regarding capital structure is most accurate?
A) As long as the firm's choice of securities does not change the cash flows generated by its assets,the capital structure decision will not change the total value of the firm or the amount of capital it can raise.
B) If securities are fairly priced,then buying or selling securities has a positive net present value (NPV) and will,therefore,change the value of a firm.
C) The future repayments that the firm must make on its debt are larger than the amount of the loan it receives up front.
D) An investor who would like more leverage than the firm has chosen can lend and add leverage to his or her own portfolio.
E) The firm can increase debt levels to increase firm value.
Correct Answer:
Verified
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