In a World with No Taxes,Modigliani and Miller (MM)show That

question 49

True/False

In a world with no taxes,Modigliani and Miller (MM)show that a firm's capital structure does not affect its value.However,when taxes are considered,MM show a positive relationship between debt and value,i.e. ,the firm's value rises as it uses more and more debt,other things held constant.

---

Definitions:

Insulin

Pancreatic hormone that encourages uptake of glucose by target cells; lowers level of glucose in the blood.

Unwanted Solutes

Substances dissolved in a fluid (like water) that are not desired, often requiring processes for their removal.

Urinary Excretion

The process of removing waste and toxic substances from the body through the formation and discharge of urine.

Respiration

Physiological processes that collectively supply animal cells with oxygen and dispose of their waste carbon dioxide.