Corporate Financial Theory 7 公司财务理论.pptVIP

Review Pre Mid-Term -- Debt vs. Equity overview Last Lecture (Ch 17) reintroduced these topics Now - We will begin to add real world complexities. Topics Covered Debt and Value in a Tax Free Economy Corporate Taxes and Debt Policy Cost of Financial Distress Explaining Financial Choices MM (Debt Policy Doesn’t Matter) Modigliani Miller When there are no taxes and capital markets function well, it makes no difference whether the firm borrows or individual shareholders borrow. Therefore, the market value of a company does not depend on its capital structure. MM (Debt Policy Doesn’t Matter) Assu