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Which of the following statements is true about the cost of equity in the model...

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Finance

Which of the following statements is true about the cost of equity in the model by Modigliani & Miller with taxes? A. The cost of equity is constant and does not depend on the amount of leverage that a firm uses. B. The cost of equity increases with the amount of the leverage that a firm uses. C. The cost of equity is U-shaped in the amount of leverage (i.e., the minimum cost of equity is somewhere

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