Figure 172
Two Pie Models of Capital Structure
Ross et al.: Fundamentals of Corporate Finance, Sixth Edition, Alternate Edition
VI. Cost of Capital and Long-Term Financial Policy
17. Financial Leverage and Capital Structure Policy
© The McGraw-Hill Companies, 2002
PART SIX Cost of Capital and Long-Term Financial Policy
M&M Proposition II
The proposition that a firm's cost of equity capital is a positive linear function of the firm's capital structure.
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