Who are Modigliani and Miller (MM), and what were their conclusions regarding the effect of capital structure on a firms value and cost of capital under the assumption of no corporate taxes How do their conclusions change when they introduce corporate taxes If a firms managers thought that MM were ...

Modigliani and Miller are Nobel Prize winning financial economists who did pioneering work ...

Who are Modigliani and Miller (MM), and what were their conclusions regarding the effect of capital structure

Question:

Who are Modigliani and Miller (MM), and what were their conclusions regarding the effect of on a firm’s value and under the assumption of no corporate taxes? How do their conclusions change when they introduce corporate taxes? If a firm’s managers thought that MM were exactly right, and they wanted to maximize the firm’s value, what would they choose?

Capital Structure
Capital structure refers to a company’s outstanding debt and equity. The capital structure is the particular combination of debt and equity used by a finance its overall operations and growth. Capital structure maximizes the market value of a... Cost Of Capital
Cost of capital refers to the opportunity cost of making a specific investment . Cost of capital (COC) is the rate of return that a firm must earn on its project investments to maintain its market value and attract funds. COC is the required rate of...