We introduced Lecture 5 by proving the Modigliani Miller I theorem, which states that capital structure is irrelevant for firm value under a restrictive set of assumptions. We then demonstrated violations of MM I in several contexts. In particular, when taxes favor one type of financing over another, we showed that capital structure is relevant for firm value. Using your understanding of the MM I theorem and the Topic 3 papers, provide detailed answers to the following questions: 1. Basic MM I a

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The ModiglianiMiller theorem MM states that the market value of a company is correctly calculated a... View the full answer