Modigliani and Miller Proposition I

Definition:

A proposition by Modigliani and Miller which states that a firm cannot change the total value of its outstanding securities by changing its capital structure proportions. Also called the irrelevance proposition.

Investing Essentials


Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

Term of the Day

Exchange privilege

A mutual fund shareholder's right to switch from one fund to another within one fund family, usually at no additional charge.

Subscribe to the Term of the Day via email Get the Term of the Day in your inbox!


Create your free portfolio