According to MM, in a world without taxes the optimal capital structure for a firm is approximately 100% debt financing.

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According to Modigliani and Miller (MM) theorem, in a world without taxes, transaction costs, or bankruptcy costs, the capital structure of a firm (debt vs. equity financing) does not affect its overall value. This implies there is no optimal capital structure in terms of debt-to-equity ratio.

According to MM, in a World Without Taxes the Optimal