In Miller's model, when the quantity (1 - TC)(1 - TpE) = (1 - Tp), then:

Name: In Miller's model, when the quantity (1 - TC)(1 - TpE) = (1 - Tp), then:
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This equation indicates that the tax shield from debt (represented by TC) is offset by the higher personal taxes paid on interest income (represented by TpE). Therefore, there is no net benefit to holding debt and the firm should not hold any debt, making the value of the unlevered firm greater than the value of the levered firm.

In Miller's Model, When the Quantity (1 - TC)(1 -