JJJ Corp. has $10 million in assets and is currently financed with 100 percent equity. The firm decides to switch to a 60 percent equity/40 percent debt structure and decides to fund the next $4 million of assets for future projects entirely with debt, resulting in the desired capital structure at some point in the future. This is an example of:

Active capital structure management.

Separation principle.

Passive capital structure management.

Modigliani-Miller theorem in practice.

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passive capital structure management or Modigli... View the full answer