Modigliani and Miller - Revision history

imported>Doug Williamson: Classify page.

2019-08-25T18:54:36Z

Classify page.

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	* [[Arbitrage]]		* [[Arbitrage]]
	* [[Capital structure]]		* [[Capital structure]]
			* [[Cost of capital]]
	* [[Cost of financial distress]]		* [[Cost of financial distress]]
			* [[Debt]]
			* [[Equity]]
	* [[Optimal capital structure]]		* [[Optimal capital structure]]

	[[Category:Corporate_finance]]		[[Category:Corporate_finance]]
			[[Category:Investment]]
			[[Category:Long_term_funding]]
			[[Category:Financial_products_and_markets]]

imported>Doug Williamson: Category added 9/10/13

2013-10-09T11:23:11Z

Category added 9/10/13

← Older revision		Revision as of 11:23, 9 October 2013
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	* [[Cost of financial distress]]		* [[Cost of financial distress]]
	* [[Optimal capital structure]]		* [[Optimal capital structure]]

			[[Category:Corporate_finance]]

imported>Doug Williamson: Spacing

2013-06-12T16:00:27Z

Spacing

← Older revision		Revision as of 16:00, 12 June 2013
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	Franco Modigliani and Merton Miller, the authors of an important series of papers from 1958 to 1969 on capital structure and related matters, often referred to as MM or M&M.		Franco Modigliani and Merton Miller, the authors of an important series of papers from 1958 to 1969 on capital structure and related matters, often referred to as MM or M&M.


	Their names are often equated with their ideas on arbitrage. Namely that at lower levels of debt the total cost of capital for a business is determined by the characteristics of the underlying business rather than by the way in which that business is financed.		Their names are often equated with their ideas on arbitrage. Namely that at lower levels of debt the total cost of capital for a business is determined by the characteristics of the underlying business rather than by the way in which that business is financed.

	Therefore, whatever the proportions of equity and debt in the capital structure, in the absence of taxation the returns to the equity component will adjust to give adequate market returns to the providers of both debt and equity (in relation to the risk accepted) and a constant average total cost of capital.		Therefore, whatever the proportions of equity and debt in the capital structure, in the absence of taxation the returns to the equity component will adjust to give adequate market returns to the providers of both debt and equity (in relation to the risk accepted) and a constant average total cost of capital.


	These ideas were set out in their original work, later expanded and developed to accommodate the benefits of tax-sheltered debt servicing costs and additional costs of financial distress at higher levels of debt, to predict the existence of an optimal capital structure.		These ideas were set out in their original work, later expanded and developed to accommodate the benefits of tax-sheltered debt servicing costs and additional costs of financial distress at higher levels of debt, to predict the existence of an optimal capital structure.


	== See also ==		== See also ==
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	* [[Cost of financial distress]]		* [[Cost of financial distress]]
	* [[Optimal capital structure]]		* [[Optimal capital structure]]

imported>Administrator: CSV import

2012-10-23T14:20:05Z

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New page

Franco Modigliani and Merton Miller, the authors of an important series of papers from 1958 to 1969 on capital structure and related matters, often referred to as MM or M&M.

Their names are often equated with their ideas on arbitrage. Namely that at lower levels of debt the total cost of capital for a business is determined by the characteristics of the underlying business rather than by the way in which that business is financed.

Therefore, whatever the proportions of equity and debt in the capital structure, in the absence of taxation the returns to the equity component will adjust to give adequate market returns to the providers of both debt and equity (in relation to the risk accepted) and a constant average total cost of capital.

These ideas were set out in their original work, later expanded and developed to accommodate the benefits of tax-sheltered debt servicing costs and additional costs of financial distress at higher levels of debt, to predict the existence of an optimal capital structure.

== See also ==
* [[Arbitrage]]
* [[Capital structure]]
* [[Cost of financial distress]]
* [[Optimal capital structure]]