Abstract
While the assumption of zero corporate taxes is not realistic for the normal business entity, the assumption enables us to accomplish one very important objective. It establishes that without taxes the capital structure choice is not an important decision. It becomes important when we recognize the presence of significant corporate income taxes.
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References
Modigliani, F. and M.H. Miller, “The Cost of Capital, Corporation Finance, and The Theory of Investment,” The American Economic Review, June 1958, pp. 261–297.
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© 2003 Springer Science+Business Media Dordrecht
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Bierman, H. (2003). Capital Structure Decision With Zero Taxes. In: The Capital Structure Decision. Springer, Boston, MA. https://doi.org/10.1007/978-1-4615-1037-6_2
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DOI: https://doi.org/10.1007/978-1-4615-1037-6_2
Publisher Name: Springer, Boston, MA
Print ISBN: 978-1-4613-5363-8
Online ISBN: 978-1-4615-1037-6
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