Which of the following assumptions is necessary for MM Proposition I to hold?Multiple choice question.Personal taxes must be lower than corporate taxes.Managers must be acting to maximize the value of the firm.Interest rates must be low.Individuals can borrow on their own at an interest rate equal to that of the firm.

A key assumption of MM Proposition I is that Blank______.Multiple choice question.corporations can borrow at a cheaper rate than individualsindividuals can borrow as cheaply as corporationsindividuals can only borrow at a higher rate than corporations

MM Proposition I does not work with corporate taxes because Blank______.Multiple choice question.levered firms pay more taxes than unlevered firmslevered firms pay lower taxes than unlevered firmsdividends are tax deductible

MM Proposition I does not work with corporate taxes because Blank______.Multiple choice question.dividends are tax deductiblelevered firms pay lower taxes than unlevered firmslevered firms pay more taxes than unlevered firms

MM Proposition II shows that Blank______.Multiple choice question.the market value of the firm is unaffected by its capital structurethere is no risk involved with leverage when there are no corporate taxesthe cost of equity rises with leverageequity is less expensive than debt

With taxes, MM Proposition I says the value of the levered firm will be Blank______ the value of the unlevered firm.Multiple choice question.greater thanless thanthe same as