Question
Select all that apply
In the absence of taxes, the value of a firm is the same with debt financing as it is with equity financing because Blank______.
Multiple select question.
debt financing is actually better than equity financing.
the asset to be financed is the same
MM demonstrated that debt financing is neither better nor worse than equity financing in the absence of taxes
equity financing is actually better than debt financing
In the absence of taxes, the value of a firm is the same with debt financing as it is with equity financing because Blank______.
Multiple select question.
debt financing is actually better than equity financing.
the asset to be financed is the same
MM demonstrated that debt financing is neither better nor worse than equity financing in the absence of taxes
equity financing is actually better than debt financing
Answers
Answered by
GPT-4o mini
In the absence of taxes, the value of a firm is the same with debt financing as it is with equity financing because:
- **the asset to be financed is the same**
- **MM demonstrated that debt financing is neither better nor worse than equity financing in the absence of taxes**
The other options ("debt financing is actually better than equity financing" and "equity financing is actually better than debt financing") are not applicable in this context.
- **the asset to be financed is the same**
- **MM demonstrated that debt financing is neither better nor worse than equity financing in the absence of taxes**
The other options ("debt financing is actually better than equity financing" and "equity financing is actually better than debt financing") are not applicable in this context.
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