The MM Theory with taxes implies that firms should issue maximum debt. In practice, this is not true because Bankruptcy is a disadvantage to debt.
The Modigliani-Miller theorem states that a firm's capital structure does not affect its value. The theorem states that market value is determined by the present value of future earnings. This theorem has been influential since it was introduced in the 1950s.
Full market investors can borrow for the same cost as they lend and invest rationally. It is also implied that the process has no transaction costs.
The mm theorem states that a company's capital structure is not a factor in its value. The theorem states that market value is determined by the present value of future earnings. This theorem has been influential since it was introduced in the 1950s.
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$50,000 is the principal amount.
When you initially apply for a house loan, you borrow a certain amount of money, which is known as the principle. Simply deduct your down payment from the final selling price of your house to determine your mortgage principal.
The formula for calculating the Principal amount would be P = I / (RT) where Interest is Interest Amount, R is Rate of Interest and T is Time Period.
I = $ 500
RT= .12 X 30/360
So,
P = I/RT
P= 500/0.01
P= $50,000
Holly loaned funds at 12 or 30 days and earned $500 in interest. The principal amount on this loan is $50,000
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Answer: A) TO PERSUADE
Explanation:EDGE 2022 CORRECT