MM Proposition I without taxes
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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
- Financial management. A combination of enterprise efforts undertaken in order to procure and utilize monetary resources of the enterprise.
