When corporate taxes are only market imperfection considered

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Reference no: EM131321575

1. When corporate taxes are the only market imperfection considered,"

a.the valuation of a company with a levered capital structure is greater than the valuation of an identical company with an unlevered capital structure.

b.the valuation of a company with a levered capital structure is lesser than the valuation of an identical company with an unlevered capital structure.

c.the valuation of a company with a levered capital structure is identical to the valuation of an identical company with an unlevered capital structure.

d.it is not possible to determine the relationship between the valuations of companies with different capital structures.

2. Under perfect capital markets, the valuation of a company __________ on the level of leverage"

a. depends only

b.depends mostly

c.depends somewhat

e. is independent

Reference no: EM131321575

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