The Modigliani-Miller (M&M)theorem states that:

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The Modigliani-Miller theorem states that in an efficient market without taxes and bankruptcy costs, the value of a firm does not depend upon the firm's capital structure. This means that the way a company finances its operations (through equity or debt) does not affect the overall value of the company. However, in real-world situations, taxes and bankruptcy costs can affect the value of a firm and therefore, the M&M theorem may not hold true.

The Modigliani-Miller (M&M)theorem States That