Contemporary Financial Management
Contemporary Financial Management
14th Edition
ISBN: 9781337090582
Author: R. Charles Moyer, James R. McGuigan, Ramesh P. Rao
Publisher: Cengage Learning
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Chapter 13, Problem 1QTD
Summary Introduction

To discuss: The Person M’s research outcome in the area of capital structure.

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According to the person M’s research outcome the worth of a company is independent of its structure of capital in perfect capital markets condition with no income taxes. Though, when person M permit bankruptcy costs and income taxes to happen, they demonstrate a value-optimizing structure of capital that is fewer than 100 percentage of debt is reached.

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