Ask Question
BusinessBusiness
17 June, 08:11

According to Modigliani and Miller (MM), in a world with corporate income taxes, the optimal capital structure calls for approximately 100% debt financing. a. Trueb. False

+2
Answers (1)
  1. 17 June, 09:39
    0
    True

    Explanation:

    The Modigliani Miller approach basically aims at the valuation of company, in which with each component of debt present with corporate taxes involved, the cost of business is reduced and that the value is increased.

    As according to that when the taxes are present, the the debt component will only increase the return and value of the business.

    Thus, it provides for increasing worth of business through debt utilization.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “According to Modigliani and Miller (MM), in a world with corporate income taxes, the optimal capital structure calls for approximately 100% ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers
You Might be Interested in
What are the principles of logic and critical thinking?
Answers (2)
Jax recording studio purchased 8100 in electronic components from music world. Jax signed a 90 day, 8% promissory note for 8100. Music worlds journal entry to record the sale transaction
Answers (1)
Exercise 10-14 (Part Level Submission) Pronghorn Inc. has decided to purchase equipment from Central Michigan Industries on January 2, 2020, to expand its production capacity to meet customers' demand for its product.
Answers (1)
Discuss the reasons why suppliers are sometimes reluctant to share cost information with buyers - particularly during the early stage of a buyer-seller relationship.
Answers (1)
In the short run, if the marginal product is at its maximum, then the A. average variable cost is at its minimum. B. average cost is at its minimum. C. total cost is at its maximum. D. marginal cost is at its minimum.
Answers (1)
New Questions in Business
Which most likely results from producers engaging in specialization? Producers reduce their costs. Producers increase their market share. Producers decrease the materials needed for production. Producers always offer more competitive pricing.
Answers (1)
The workers at State Hospital, a public sector employer, and Acme Inc, a private employer, are subject to speech censorship and arbitrary job termination. Constitutional issues are present only for the State Hospital workers. TrueFalse
Answers (1)
Kyle and lyle want to pool their inheritance money to make a joint investment. they are young and are willing to accept moderate to high risk over a number of years. which combination of investment options best suits their needs?
Answers (1)
Paper Clip Company sells office supplies. The following information summarizes the company's operating activities for the year: Utilities for the store $ 10 comma 300 Sales commissions 10 comma 300 Sales revenue 164 comma 100 Purchases of
Answers (1)
If joe were to introduce himself as dr. early to sell to gensol, knowing that people would assume that he was a medical doctor, but never tell anyone that he was, would contracts entered into be considered to be fraudulent?
Answers (1)
Home » Business » According to Modigliani and Miller (MM), in a world with corporate income taxes, the optimal capital structure calls for approximately 100% debt financing. a. Trueb. False
Sign Up Forgot Password?