Modigliani Miller Theorem - Capital Stucture

Abstract Since business has been in existence, management has been placed in the dilemma of increasing the total value of their company and in determining what way this is measured. The question manager's face is there a need for debt financing and/or will there be a profit, if so, what are the pros and cons for these decisions? The type of company policy in regards to payout or the financial decisions would not necessarily …

…Groth., John, C., and Anderson, Ronald C., (1997), Capital Structure : Perspective for Managers, 35 (7/8) Harvey, C.R. (2004). Modigliani and Miller Proposition I. Retrieved August 22, 2006, from http://financial-dictionary.thefreedictionary.com/ Liesz, T.J. (2001). Why should Pecking Order Theory should be included http://www.mountainplains.org/articles/2001/pedagogy/PECKING ORDER THEORY.htm Modigliani, F. and Miller, M. "The Cost of Capital, Corporation Finance and the Theory of Investment," American Economic Review (June 1958). -Miller-Theorem. The Cost of Capital. American Review, 1958