Question: (CHAPTER 16) In the list below, two statements are true and two are false. - Miller and Modigliani Proposition 2, with taxes says that unlevered

(CHAPTER 16) In the list below, two statements are true and

(CHAPTER 16) In the list below, two statements are true and two are false. - "Miller and Modigliani Proposition 2, with taxes" says that unlevered firm value is lower than levered firm value. - The higher the ratio of debt to equity in a firm's capital structure, the higher the risk to the stockholders. - Stockholders can replicate the effect of an all-equity firm by buying shares of a levered firm and simultaneously borrowing money. - The weighted average cost of capital is independent of the amount of debt when the firm does not pay taxes. [Select]

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