The modigliani and miller hypothesis does not work in the


The Modigliani and Miller hypothesis does NOT work in the "real world" because: a) interest is tax deductible, providing an advantage to debt financing b) higher levels of debt increase the likelihood of bankruptcy, and bankruptcy has real costs for any corporation c) both a and b d) dividend payment are fixed and tax deductible for the corporation

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Financial Management: The modigliani and miller hypothesis does not work in the
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