1. Modigliani and Miller (MM) won Nobel Prizes for their work on capital structure theory.
a. True
b. False
2. According to Modigliani and Miller, in a world without corporate income taxes, the use of debt has no effect in the firm’s value.
a. True
b. False
3. According to Modigliani and Miller (MM), in a world without taxes, the optimal capital structure for a firm is approximately 100% debt financing.
a. True
b. False