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1. Explain the two Irrelevance Propositions advanced by Modigliani and Miller (M&M) in 1958. Give an intuitive argument for why these propositions are plausible. In
1. Explain the two Irrelevance Propositions advanced by Modigliani and Miller (M&M) in 1958. Give an intuitive argument for why these propositions are plausible. In contrast to the position of M&M, what is an Optimal Capital Structure? Describe the Static Trade-Off Theory that resulted from a synthesis of the work of M&M and their critics, carefully explain the elements that are being weighed in the decision.
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