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0. Given below are two statements, one labeled as Assertion (A) and the other labeled as Reason (R). Read the statements and choose the correct answer using the code given below. Assertion (A): As per M-M hypothesis the value of the levered firm is equal to the value of the unlevered firm. Reason (R): The process of arbitrage becomes applicable in such situations. Code:
Both (A) and (R) are correct and (R) is the right explanation of (A).
Both (A) and (R) are correct, but (R) is not the right explanation of (A).
(A) is correct, but (R) is incorrect.
Both (A) and (R) are incorrect.
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