Modigliani-Miller Theorem - is it Any Good For Business Valuation?
Equilest
JANUARY 8, 2023
This is because the firm's value is determined by its expected future cash flows, and the choice of financing - whether through debt or equity - does not affect the firm's overall value. . Suppose each firm produces an annual cash flow of 10 million USD. Suppose also the weighted average cost of capital is 10%.
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