1. In a world with corporate taxes, MM theory implies that that all firms should:
a. Choice maintain a constant value.
b. decrease in value as the leverage of the firm increases.
c. choose an all-debt capital structure.
d. select the capital structure that maximizes the firm's WACC.
e. select the capital structure that equates the marginal cost of debt with the marginal benefits.
2. Please discuss and provide support on the potential ethical dilemma of audit independence as it pertains to having shares in a company. Information should include the following:
· The key governing bodies charged with the creation and oversight of the selected topic.
· The authoritative literature (i.e. SASs) related to the topic.
· An analysis of key ethical considerations related to the topic (including theoretical