One of the Conditions That the M&M Propositions Required Was

question 21

Essay

One of the conditions that the M&M Propositions required was for not to have taxes. Briefly discuss whether the introduction of taxes decreases or increases the value of the firm.

---

Definitions:

Growth In Dividends

The pace at which dividend distributions to shareholders by a company grow over a period.

Required Rate Of Return

This is the minimum return that investors expect or demand for an investment to be considered worthwhile.

Market Price

The contemporary market price for acquiring or disposing of an asset or service.

Present Value

The current worth of a future sum of money or stream of cash flows given a specified rate of return, factoring in the time value of money.