The work of Modigliani and Miller produced a near 100% debt/value mix for firms in a world of taxes.As it turns out,the theoretical and the actual debt/value ratio for most firms are almost identical at just about 100%.

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While Modigliani and Miller's theory suggests that a firm's debt/value ratio should reach close to 100% in a world with taxes, in reality, most firms do not have a debt/value ratio of 100%. Factors such as bankruptcy costs, agency costs, and market imperfections can affect a firm's optimal capital structure.

The Work of Modigliani and Miller Produced a near 100