MM's Proposition I corrected for corporate taxes states that Value of levered firm = Value of unlevered firm + PV tax shield.

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MM's Proposition I corrected for corporate taxes is known as the Modigliani-Miller theorem and it states that the value of a leveraged firm is equal to the value of an unlevered firm plus the present value of the tax shield. This means that adding debt to a company's capital structure can increase its value by lowering the taxes it pays.

MM's Proposition I Corrected for Corporate Taxes States That Value