The primary difference between the “classic” set of assumptions used by Stewart and the more “modern” assumptions introduced in class is – A.

The primary difference between the “classic” set of assumptions used by Stewart and the more “modern” assumptions introduced in class is –

A.The modern assumptions assign a risk level to the Tax Shield equal to the firm’s debt, where the classic assumptions assume the risk of the Tax Shield is similar to the risk of the business

B.The classic assumptions assume constant debt; the modern assumptions assume a constant D/E ratio

C.The classic assumptions assume the debt is risk free while the modern assumptions don’t

D.The modern assumptions take the debt to be constant whereas the classic assumptions take the D/E to be constant