According to Modigliani and Miller (MM),in a World Without Taxes

question 36

True/False

According to Modigliani and Miller (MM),in a world without taxes the optimal capital structure for a firm is approximately 100% debt financing.

---

Definitions:

Reorganization

Involves restructuring the legal, ownership, operational, or other structures of a company to make it more profitable or better organized for its present needs.

Unperfected Security Interest

A claim or lien on property or assets that has not been formally registered or publicized, making it vulnerable to third-party claims.

Bankruptcy Petition

A formal request filed in a bankruptcy court for protection from creditors, initiating the bankruptcy process.

Security Interest

A legal claim or right granted over assets as collateral to secure the performance of an obligation, usually repayment of a loan.