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jk jk
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3 years ago
According to Modigliani and Miller, altering a firm's capital structure will not change a firm's value because

▸ taxes have no effect on capital structure decisions.

▸ the value of a firm is based on the earnings power of its assets.

▸ markets are not efficient and shareholders can be fooled by capital structure changes.

▸ bankruptcy costs rise when debt levels increase.

▸ the cost of equity falls as more debt is issued.
Textbook 
Corporate Finance Online

Corporate Finance Online


Edition: 2nd
Authors:
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TurkiTurki
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3 years ago
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You make an excellent tutor!
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