The Modigliani and Miller Capital Structure Theorem,in its original form,assumes:
A)there are no transactions costs.
B)there are no taxes.
C)investors can borrow money at the same rate as the firm.
D)all of the above.

Question

Quizplus · Accepted Answer

The Modigliani and Miller Capital Structure Theorem, in its original form, assumes that there are no transactions costs, no taxes, and investors can borrow money at the same rate as the firm. These assumptions provide the perfect world scenario in which the theorem operates, allowing for the concept of irrelevance of capital structure to hold.

The Modigliani and Miller Capital Structure Theorem,in Its Original Form,assumes