Capital Structure Modigliani-Miller Assumptions: Define and discuss Modigliani-Millers theory. List the three assumptions that lie behind the Modigliani-Miller theory in a world without taxes. Are these assumptions reasonable in the real world? Explain. Capital Structure Decisions: Due to large losses incurred in the past several years, a firm has $2 billion in tax loss carryforwards. This means that the next $2 billion of the firms income will be free from corporate income taxes. Are these assumptions reasonable in the real world? Explain