Use a pizza analogy to explain why capital structure should not influence firm value in a world
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Use a pizza analogy to explain why capital structure should not influence firm value in a world with no taxes, transaction costs or financial distress costs. List three assumptions that lie behind the Modigliani–Miller theory in a world without taxes. Are these assumptions reasonable in the real world? Explain.
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The ModiglianiMiller theory states that in a world without taxes transaction costs or financial distress costs the capital structure of a firm should ...View the full answer
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Related Book For
Corporate Finance
ISBN: 9780077173630
3rd Edition
Authors: David Hillier, Stephen A. Ross, Randolph W. Westerfield, Bradford D. Jordan, Jeffrey F. Jaffe
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