The assumption that firm debt-equity ratio is constant means

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Reference no: EM131571984

The assumption that the firm's debt-equity ratio is constant means:

A. the firm's cost of capital will not fluctuate when it accepts a new project.

B. corporate taxes are the only imperfection.

C. the risk of its debt and equity will change when it accepts a new project.

D. the firm adjusts its leverage to maintain a constant debt-equity ratio in terms of book value.

Reference no: EM131571984

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