According to Modigliani & Miller first proposition without taxes:

1)	Managers prefer to make financing choices that are least likely to send signals to investors.

2)	The firm should use internal sources of financing before pursuing external sources.

3)	The firm should use debt up to the point where the tax benefit from an extra dollar in debt is exactly equal to the cost that comes from the increased probability of financial distress.

4)	The firm leverage is irrelevant.