Asked by
Samanthaa Sadler
on Dec 09, 2024
Verified
In relation to M&M Proposition II with no taxes, the return on assets is equal to the weighted average cost of capital.
Return on Assets
A financial ratio indicating how profitable a company is relative to its total assets.
Weighted Average Cost of Capital
An average representing the expected return on all of a company's securities, weighted according to the proportion each contributes to the total capital structure.
- Comprehend the fundamentals of Modigliani & Miller (M&M) Propositions I & II in the absence of taxes, particularly relating to the insignificance of capital structure.
Verified Answer
JT
Learning Objectives
- Comprehend the fundamentals of Modigliani & Miller (M&M) Propositions I & II in the absence of taxes, particularly relating to the insignificance of capital structure.
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