Question: What is arbitrage, and how did Modigliani and Miller use the arbitrage concept in developing their theory that (with no corporate taxes) capital Structure has

What is arbitrage, and how did Modigliani and Miller use the arbitrage concept in developing their theory that (with no corporate taxes) capital Structure has no effect on value or the cost of capital? What real-world impediments exist to creating one’s own “homemade” leverage?

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