You have been hired by MNCs as trainee finance officer and you heard from your boss that if debt is used to finance company instead of equity it will increase the firm’s shareholder value. Do you agree with this statement? Assume that taxes exist and explain the statement that the value of levered (using debt) firm is always greater than the value of unlevered (don’t use debt) firm?

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A multinational corporation MNC or worldwide enterprise is a corporate organization that owns or con... View the full answer