Discuss the finding of Modigliani and Miller in a world with taxes in regards to the...

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Finance

Discuss the finding of Modigliani and Miller in a world withtaxes in regards to the value of levered and unlevered firms. Whatdo these finding imply about the effects of capital structure? Theeffects of investment decisions? The cost of capital?

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Modigliani and Miller approach have an assumption that there are no taxes But in the real world taxes do exist This theory recognizes the tax benefits due to the the interest payments Unlevered firms when considers the component of debt in its capital See Answer

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