How a company pays for itself shouldn't change what it's worth

Modigliani and Miller proved that, under idealized conditions with no taxes or bankruptcy costs, a firm's total value is the same whether it's financed mostly with debt or mostly with equity — slicing the same pie differently doesn't make it bigger. The theorem won a Nobel Prize and became the baseline every real-world capital-structure decision gets measured against.

— Franco Modigliani & Merton Miller, The Cost of Capital, Corporation Finance and the Theory of Investment — American Economic Review, 1958

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