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M&M Proposition I
A theory stating that, in a perfect market, the value of a firm is unaffected by how it is financed, regardless of the debt-to-equity ratio.
Capital Structure
Refers to the way a corporation finances its assets through a combination of equity, debt, or hybrid securities.
M&M Proposition I
Modigliani and Miller's principle suggesting the irrelevance of financial leverage on a company's valuation in an ideal market.
Debt-Equity Ratio
A calculation of a firm's financial leverage determined by dividing its overall liabilities by the equity of its shareholders.
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