Question: (5 points) True or False. In Modigliani Miller model with corporate taxes, but no bankruptcy costs, i.e., Case II, the optimal capital structure is not

(5 points) True or False. In Modigliani Miller model with corporate

(5 points) True or False. In Modigliani Miller model with corporate taxes, but no bankruptcy costs, i.e., Case II, the optimal capital structure is not 100% debt, because, at some point, the interest that you owe on the debt will exceed the maximal value of EBIT, and there would be no more tax benefits of additional debt

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