M&M Propositions. How would you answer in the following debate?


M&M Propositions. How would you exculpation in the forthcoming deliberate?

Q: Isn"t it gentleman that the abandoniness of a steadfast"s equity obtain soften if the steadfast increases its use of lapse financing"!

A: Yes, that"s the substance of M&M Proposition II.

Q: And isn"t it gentleman that, as a steadfast increases its use of borrowing, the aspect of lapse increases, which increases the abandon of the steadfasts lapse?

A: YEs.

and the lapse"!

A: That"s right

Q: Well, dedicated that the steadfast uses singly lapse and equity financing, and dedicated that the abandon of twain is increased by increased borrowing, does it not flourish that increasing lapse increases the overall abandon of the steadfast and for-this-reason decreases the appreciate of the method?

A: ??