Modigliani-Miller Theorem - is it Any Good For Business Valuation?
Equilest
JANUARY 8, 2023
To understand the theorem, it's helpful to consider two firms that are identical in every way except for their capital structure. Firm A has a higher proportion of debt financing, while Firm B has a higher proportion of equity financing. Debt financing: 60% * 100 million USD = $60 million.
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