Which of these statements apply MM Proposition II without
taxes?
I. The expected return on equity is positively related to
leverage.
II. The value of a firm cannot be changed by changing its capital
structure.
III. Risk to equity holders increases with leverage.
IV. The expected return on equity is affected by the firm's
debt-to-equity ratio.
A.
I, II, and III only
B.
II and IV only
C.
I, II, III, and IV
D.
I, III, and IV only
Tiger...