define in the modigliani-miller equation mm, Financial Management

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define in the modigliani-miller equation mm

Define in the Modigliani-Miller equation (MM equation), why is the market value of the levered firm greater as compared to the market value of an equivalent unlevered firm?

The levered firm has a greater market value since less money is taken from the firm by the government in taxes because of tax-deductible interest payments. So, there is more cash left for investor groups as compared to when the firm is financed along with all-equity funds.

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Financial Management: define in the modigliani-miller equation mm

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Financial Management: define in the modigliani-miller equation mm

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