According to Miller and Modigliani, in a world without taxes or the possibility of bankruptcy, the value of a firm with debt is.:_____

Respuesta :

Answer:

the same as the value of a firm without debt.

basic premise is:

V levered = V unlevered

Explanation:

The Miller and Modigliani theory was developed for a tax free world. Its application on normal everyday life and reality is limited. Markets are not efficient and decisions are not always rational. It is a very good model form a theoretical point of view, but theory is not the same as reality.