Yogi Berra When a waitress asked Yogi Berra, Baseball Hall of Fame catcher for the New York Yankees, whether he wanted his pizza cut into four pieces or eight, Yogi replied: "Better make it four. I don't think I can eat eight," a Yogi's quip helps convey the basic insight of Modigliani and Miller. The firm's choice of leverage "slices" the distribution of future cash flows in a way that is like slicing a pizza. MM recognized that holding a company's investment activities fixed is like fixing the size of the pizza; no information costs means that everyone sees the same pizza; no taxes means the IRS gets none of the pie; and no "contracting costs" means nothing sticks to the knife. So, just as the substance of Yogi's meal is unaffected by whether the pizza is sliced into four pieces or eight, the economic substance of the firm is unaffected by whether the liability side of the balance sheet is sliced to include more or less debtat least under the MM assumptions. Lee Green, Sportswit (New York: Fawcett Crest, 1984), p. 228. Source: "Yogi Berra on the MM Proposition," Michael J. Barclay, Clifford W. Smith, and Ross L. Watts