📈 CFA Exam Prep

The Modigliani-Miller theorem (without taxes) states that:

A Capital structure always matters
B The value of a firm is unaffected by its capital structure in a perfect capital market
C Debt always increases value
D Equity is always superior

✓ Correct Answer: Option B

MM Proposition I: In a perfect market with no taxes, value is independent of capital structure.

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