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Capital structure is understood as the relationship between equity and debt capital of the company. Does capital structure affect the company’s main settings, such as the cost of capital, profit, value of the company, and the others, and, if it affects, how?
28 sty 2017 · Purpose of this study is to review various capital structure theories that have been proposed in the finance literature to provide clarification for the firms’ capital structure decision.
Modigliani and Miller advocate capital structure irrelevancy theory, which suggests that the valuation of a firm is irrelevant to the capital structure of a company [4]. Moreover, the...
18 lip 2021 · This theoretical review of capital structure provides a synthesis of the theory utilised in capital structure literature. This theoretical review explains two categories of theories that...
One of the two main theories of capital cost and capital structure is the theory of Nobel Prize winners Modigliani and Miller (1958, 1963, 1966). In this chapter, we describe the main results of this theory. Under the capital structure, one understands the relationship between equity and debt capital of the company.
1 sty 2015 · This group includes the MM model of Franco Modigliani and Merton Miller, the traditional approach represented by the work of H. DeAngelo, L. Dodd, D. Durand, R.W. Masulis, B. Graham and other classics of the capital structure.
By using the valuation and capital structure approach with several assumptions necessary to be made, the author has found out that the Modigliani Miller theories of capital structure do hold and are accurate for those given sample companies in representative to an industry.
