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Re: Taxation Thought Experiment
[email protected] (Igor Chudov @ home) writes:
> Dr.Dimitri Vulis KOTM wrote:
> > [email protected] (Igor "FUCK MNE HARDER" Chudov @ home) writes:
> > > Dr.Dimitri Vulis KOTM wrote:
> > > > Therefore it's sometimes more profitable for a company to raise money b
> > > > issuing bonds (debt) and paying tax-deducuble interest than by selling
> > > > stock (equity) and paying non-decuctible dividentds to stockholders.
> > > There is, in fact, a neat theorem that says that (*_under certain
> > > assumptions_*) the value of a firm does not depend on its capital
> > > structure.
> >
> > Igor, you begin to sound just like Timmy May - talking about things you kno
> > nothing about.
>
> Surely I know nothing about finance. Never claimed otherwise.
Then I suggest that you get hold of an undergraduate book on corporate finance,
such as Ross, Westerfield, Jordan, from Irwin. They just came out with the 3rd
edition). Read their very lucid explanation of M&M's work, and in particular
what they mean by "bankrupcy costs". Sure beats quoting academic papers that
you don't understand.
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<a href="mailto:[email protected]">Dr.Dimitri Vulis KOTM</a>
Brighton Beach Boardwalk BBS, Forest Hills, N.Y.: +1-718-261-2013, 14.4Kbps