Skip to content

Modigliani-Miller with tax Value VS WACC

July 17, 2017

MM Preposition I

  • Value does change because of the tax shield of debt. Value is maximized when debt is 100% of capital structure.

MM Preposition II

  • WACC does change because of the tax shield of debt. WACC is minimized when debt is 100% of capital structure.
Advertisements
Leave a Comment

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: