To answer: The given debate.
Introduction:
Modigliani-Miller theory:
Professors Modigliani and Miller made a research on capital structure theory very intensely. From the analysis, it is found that they formed a capital structure irrelevant proposal.
Debate:
There has been question raised and answer given for some questions regarding Modigliani-Miller Propositions. The questions are about equity increase, borrowing of debts and risk involved in the debts and equity. The final question raised was that, when a company uses equity or debt financing, and it is assumed that risk of both are raised by increasing in borrowing rate, so when there is a raise in the debt value and risk of the firm, will the company value decrease.
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CORPORATE FINANCE - CONNECT ACCESS
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