[blank] showed that, under some idealistic conditions, it does not matter whether a firm uses no debt, a little debt or a lot of debt in its capital structure.
A)Pecking theory
B)Modigliani and Merton Miller
C)The Australian government
D)Yogi Berra

Question

Quizplus · Accepted Answer

Modigliani and Merton Miller's capital structure theory, also known as M&M theory, shows that under the ideal conditions of no taxes and perfect markets, a firm's value is independent of its capital structure. Therefore, it does not matter whether a firm uses no debt, a little debt or a lot of debt in its capital structure.

[Blank] Showed That, Under Some Idealistic Conditions, It Does Not