If Miller and Modigliani Had Incorporated the Costs of Bankruptcy

question 29

True/False

If Miller and Modigliani had incorporated the costs of bankruptcy into their model, it is unlikely that they would have concluded that 100% debt financing is optimal.

---

Definitions:

Humanistic Approach

A psychological perspective emphasizing respect for the individual and a focus on each person's unique potential and importance of human values.

Support Groups

Structured gatherings that provide emotional, informational, or material support to individuals sharing a common experience or challenge.

Therapeutic Factors

Elements in psychological treatment that contribute to healing, including the establishment of trust, group cohesiveness, and the expression of emotions.

Group Treatment

A form of psychotherapy where a small group of individuals meet regularly to discuss and work through their issues with the guidance of a therapist.