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.

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Definitions:

Citizens United

A landmark Supreme Court case that ruled restrictions on independent political spending by corporations and unions are unconstitutional.

Campaign Funding

The financial resources collected and used to support a political campaign, candidate, or party.

Congressional Seat

A position in the United States Congress, either in the House of Representatives or the Senate, representing a specific geographic area or state.

Challengers

Individuals or groups that contest the status quo or positions of incumbents, particularly in political or competitive situations.