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According to Miller and Modigliani, in a world without taxes or the possibility of bankruptcy, the value of a firm with debt is.:_____

User Nfw
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Answer:

the same as the value of a firm without debt.

basic premise is:

V levered = V unlevered

Step-by-step explanation:

The Miller and Modigliani theory was developed for a tax free world. Its application on normal everyday life and reality is limited. Markets are not efficient and decisions are not always rational. It is a very good model form a theoretical point of view, but theory is not the same as reality.

User Terenoth
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