MM Proposition I without taxes

From CNM Wiki
Jump to: navigation, search

MM Proposition I without taxes is the equation VL = VU = EBIT/rsU. Since both EBIT and rsU are constant, firm value is also constant and capital structure is irrelevant.


Definitions

According to Financial Management Theory and Practice by Eugene F. Brigham and Michael C. Ehrhardt (13th edition),

MM Proposition I without taxes. VL =VU = EBIT/rsU. Since both EBIT and rsU are constant, firm value is also constant and capital structure is irrelevant.

Related concepts

Related lectures