Capital Structure Policy Recommendations
1. MM, No Taxes: Capital structure is irrelevant--no impact on value or WACC.
2. MM, Corporate Taxes: Value increases, WACC falls with leverage, so firms should use (almost) 100% debt financing.
3. Miller, Personal Taxes: Value increases, WACC falls, but less than under MM, so again firms should use (almost) 100% debt financing.