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.

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

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