Perfect Market

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August 31, 2024 4 min read Definitions
Modigliani-Miller Theorem: Fundamental Corporate Finance Theory
Economics Finance Corporate Finance Modigliani-Miller Theorem Capital Structure Corporate Finance Financial Theory Perfect Market
The Modigliani-Miller theorem asserts that in a perfect capital market, the value of a firm is independent of its financing methods. This theorem lays the foundation for modern corporate finance by arguing that leverage and dividend policy do not impact a firm’s value in ideal conditions.
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