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The Modigliani and Miller hypothesis does not work in the real world because: interest expense is tax deductible, providing an advantage to debt financing. higher
The Modigliani and Miller hypothesis does not work in the "real world" because: interest expense is tax deductible, providing an advantage to debt financing. higher levels of debt increase the likelihood of bankruptcy, and bankruptcy has real costs for any corporation. both A and B. dividend payments are fixed and tax deductible for the corporation. ****Please explain or give an example (or I cannot rate response) ***
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