According to MM, if individuals cannot obtain the same borrowing terms as firms, then:

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According to MM, capital structure becomes relevant when individuals cannot obtain the same borrowing terms as firms. This is because in this scenario, the cost of equity for the firm is affected by the amount of debt it employs, which can in turn impact the value of the firm. Therefore, capital structure can have an impact on the value of the firm and its ability to raise funds, making it a relevant consideration.

According to MM, If Individuals Cannot Obtain the Same Borrowing