PPT Slide
Graph of Value vs. Debt, without Taxes
Value of Firm, V (%)
4
3
2
1
0 0.5 1.0 1.5 2.0 2.5
Debt (Millions of $)
VL
VU
Firm value ($3.6 Million)
With zero taxes, MM argue that value is unaffected by leverage.
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