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Discuss what may lead to a breakdown of the Modigliani-Miller irrelevance theorem, and give an overview...

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Finance

Discuss what may lead to a breakdown of the Modigliani-Millerirrelevance theorem, and give an overview of the trade-off theoryand the pecking-order theory of capital structure.

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The irrelevance theory of Modiglani Miller states that the capital structure of a company is irrelevant if the distressed costs and income ax is not present This theory lacks reality because in real life we do not    See Answer
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Discuss what may lead to a breakdown of the Modigliani-Millerirrelevance theorem, and give an overview of the trade-off theoryand the pecking-order theory of capital structure.

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