Outline the modigliani and miller valuation propositions


1. Outline the Modigliani and Miller valuation propositions. Specify the assumptions on which their propositions are based.

2. Modigliani and Miller’s Proposition 1 and 2 are contradictory. Shareholders cannot be indifferent to the use of debt when it increases the expected rate of return on their investment. Comment on whether you agree or disagree with this statement, and provide reasoning.

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Financial Management: Outline the modigliani and miller valuation propositions
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