Modigliani-Miller Theorem
If there were no tax advantages for issuing debt, and equity could be freely issued, Miller and Modigliani showed that, under certain assumptions, the value of a leveraged firm and the value of an unleveraged firm should be the same.
Read more about this topic: Cost Of Capital
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“To insure the adoration of a theorem for any length of time, faith is not enough, a police force is needed as well.”
—Albert Camus (1913–1960)