In its original form,the Modigliani and Miller Capital Structure Theorem
A)uses unrealistic assumptions.
B)provided important insights into capital structure policy.
C)concludes that how a firm is financed is not important.
D)all of the above.

Question

Quizplus · Accepted Answer

The Modigliani and Miller Capital Structure Theorem uses unrealistic assumptions, such as perfect information, no taxes, and no bankruptcy costs. However, the theorem provided important insights into capital structure policy, such as the irrelevance of capital structure in a perfect market without taxes or bankruptcy costs. Therefore, the correct answer is D, all of the above.

In Its Original Form,the Modigliani and Miller Capital Structure Theorem