Modigliani and Miller (MM),in Their Second Article,took Account of Taxes,bankruptcy,and

question 21

True/False

Modigliani and Miller (MM),in their second article,took account of taxes,bankruptcy,and other factors that were assumed away in their original article.Once they took account of all these assumptions,they concluded that every firm has a unique optimal capital structure.Moreover,a manager can use the second MM model to determine his or her firm's optimal debt ratio.

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Definitions:

Temporarily Absent

A status referring to individuals who are not present at their usual place of work or duty for a brief period due to reasons like illness, vacation, or personal issues but are expected to return.

Numerical Data

Data that is represented or measured in numbers, which can be used for mathematical calculations and statistical analysis.

Multibit

Pertaining to a data format or system that utilizes more than one bit to represent information, allowing for a wider range of values or states.