Question: 1 3 MM Proposition I without taxes does not hold when corporate taxes are introduced because: Multiple Choice points 8 0 2 1 4 0

13
MM Proposition I without taxes does not hold when corporate taxes are introduced because:
Multiple Choice
points
8021401
levered firms pay less in taxes than identical unlevered firms.
bondholders require higher rates of return than stockholders do.
earnings per share are no longer relevant with taxes.
dividends become a tax shield.
debt is more expensive than equity.
1 3 MM Proposition I without taxes does not hold

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