Imagine you plan to buy a flat near Dallas . The flat costs $400,000. You have three options of buying this flat.
Option 1: You pay the entire money from your personal savings.
Option 2: You borrow $100,000 from Chase Bank and you pay the remaining $300,000 from your personal savings.
Option 3: You borrow $300,000 from Chase Bank and you pay the remaining $100,000 from your personal savings.
From the above options which one would you prefer, using the Modigliani's and Miller concept explain the reason for your answer