General Studies · Capital Structure Theories
Statement I: According to the Net Income (NI) approach, capital structure decision is relevant to the value of the firm. Statement II: Modigliani-Miller theory (without taxes) assumes no transaction costs and perfect capital markets.
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1Both statements are correct.✓
- 2Both statements are incorrect.
- 3Statement I is correct but Statement II is incorrect.
- 4Statement I is incorrect but Statement II is correct.
Correct answer
Both statements are correct.
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