11.1 Learning Outcomes:
Describe the two Modigliani and miller propositions, the key assumptions underlying them, and their relevance to capital structure decisions. Use proposition 2 to calculate the return on equity.
Discuss the benefits and costs of using debt financing and calculate the value of the income tax benefit associated with debt.
11.2 Action Required:
Kindly go through the article in the following link:
M&M Theorem – Overview, Assumptions, Propositions
11.3 Test your Knowledge :
Compare M&M Theorem Proposition 1 and Proposition 2 in perfectly efficient market and in the real world.
11.4 Instructions
Answer the given question in Discussion Board.
12.1 Learning Outcomes:
Explain what a dividend is
Explain what a stock repurchase is
12.2 Action Required:
Kindly go through the article in the following link:
Payout Definition
12.3 Test your Knowledge :
Defined payout policy.
What are the two main ways companies distribute earnings to investors?
12.4 Instructions
Answer the given question in Discussion Board
