Disproving the MM Theorem

7 Pages Posted: 1 Jun 2016 Last revised: 11 Aug 2022

See all articles by Hak Choi

Hak Choi

Chienkuo Technology University - Department of International Business; Chung-Hua Institution for Economic Research

Date Written: May 29, 2016

Abstract

Franco Modigliani and Merton Miller claimed that a firm is indifferent between borrowing and equity financing, and between capital structure and market value. This paper makes use of their other measure to tell exactly when a firm should borrow and when it should issue shares. No more ambiguity.

Keywords: Corporate Finance

JEL Classification: G32

Suggested Citation

Choi, Hak, Disproving the MM Theorem (May 29, 2016). Available at SSRN: https://ssrn.com/abstract=2786431 or http://dx.doi.org/10.2139/ssrn.2786431

Hak Choi (Contact Author)

Chienkuo Technology University - Department of International Business ( email )

No.1, Chiehsou N. Road
Changhua City, 500
Taiwan
+886 91 901-4618 (Phone)

HOME PAGE: http://euntold.wordpress.com

Chung-Hua Institution for Economic Research ( email )

75, Changhsin St.
Taipei
Taiwan

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