DETERMINING THE OPTIMAL CAPITAL STRUCTURE

Determining the Optimal Capital Structure

Determining the Optimal Capital Structure

The Modigliani-Miller theorem, suggested by Franco Modigliani and Merton Miller, types the cornerstone for up to date conceiving on capital structure, though it is usually examined as a solely theoretical outcome since it supposes away numerous significant components in the capital structure decision. The theorem states that, in a flawless market, how a firm is financed is irrelevant to its value. This outcome presents the groundwork with which to analyze genuine world causes why capital structure is applicable, that is, a company's worth is influenced by the capital structure ...