MODIGLIANI-MILLER THEOREM - M&M

A financial theory which states the company’s market value is assessed by its earning capability and the risk of its assets, as well as it is independent of the way it selects to fund investments or dispense dividends. A company can opt between three methods of financing: issuing shares, borrowing, or spending profits. In other words, it does not make any difference if a company finances itself either with debt or equity.