Assess tax rates-dividend payout policy

Reference no: EM13751308

Financing corporate purchases and overall capital budgeting usually requires the finance manager to assess tax rates, dividend payout policy, weighting of capital sources, and more. However, the Modigliani and Miller propositions state that, in most situations, it does not matter if the firm's capital is raised by issuing stock or selling debt. As a student one might assume studies of capital budgeting strategies will no longer be reviewed in coursework. Before coming to that conclusion please discuss the principles presented by Modigliani and Miller and explain your agreement or disagreement.

Reference no: EM13751308

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