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Abstract–Capital Structure and the Value of the Firm

Published online by Cambridge University Press:  19 October 2009

Frederic H. Murphy ,
Aharon R. Ofer  and
Mark A. Satterthwaite
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Extract

In their 1958 article Modigliani and Miller showed that if two firms are in the same risk class and in an economy with a perfect capital market having no transaction costs, taxes, or no bankruptcy costs, then their relative market values are independent of their capital structures.

Type
II. Corporate Financing Decisions
Information
Journal of Financial and Quantitative Analysis , Volume 10 , Issue 4 , November 1975 , pp. 541
Copyright
Copyright © School of Business Administration, University of Washington 1975

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