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How well do the assumptions behindd modigliani-miller match what happens in the real world? I think 'invalidated' is a little strong. Do be aware that within e
by soVeryTired 10y ago
How well do the assumptions behindd modigliani-miller match what happens in the real world?
I think 'invalidated' is a little strong. Do be aware that within economic models, the map is not the territory.
- semi-extrinsic 10y agoWell, it assumes no taxes (so it would only apply to Apple et al.), and also symmetric information and an efficient market (which are both debatable).
- soVeryTired 10y agoThe assumptions are extremely strong, and the theory is not robust to changes in those assumptions. Agree?