Loading...
CFA Level 2
Corporate Finance

Modigliani-Miller Proposition and Capital Structure

Easy Capital Structure Decisions Modigliani-miller Propositions

XYZ Corporation is considering various capital structure strategies to finance its operations. The management is unsure whether to issue more debt or equity, as they are considering the implications on their overall value and cost of capital. According to the Modigliani-Miller Proposition in a world without taxes, what can be concluded about capital structure and its effect on the firm's value?

Hint

Submitted2.5K
Correct2.0K
% Correct82%