Question: According to M&Ms Proposition II the expected return on a levered firms equity: a. Falls to the debt-to-equity ratio b. The levered firms equity expect

According to M&Ms Proposition II the expected return on a levered firms equity:

a. Falls to the debt-to-equity ratio

b. The levered firms equity expect return does not change with the debt-to-equity level

c. Rises with the debt-to-equity ratio Rises with the debt-to-equity ratio

d. Proposition II does not address the leveraged firms expected return on equity

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