Under the assumptions necessary for MM I, if investors can borrow or lend at the same terms as the firm, they will:

Name: Under the assumptions necessary for MM I, if investors can borrow or lend at the same terms as the firm, they will:
Brand: Quizplus
Rating: 4.8 (50 reviews)

Question

Quizplus · Accepted Answer

Under MM I (Modigliani-Miller Proposition I), the value of a firm is unaffected by its capital structure. Therefore, investors will not pay more for a firm that has been restructured, as the overall value remains the same regardless of the mix of debt and equity.

Under the Assumptions Necessary for MM I, If Investors Can