Applying the Modigliani – Miller Theorem of Capital Structure to Governments: Why ‘Blue Bonds’ Are Not the Silver Bullet to Kill the Eurozone Debt Crisis

In 1958 Merton Miller and Franco Modigliani published an article outlining the idea that in perfect capital markets the value of a company does not depend on its financing structure. The value of assets of a company does not increase if you raise the weight of debt in its financing structure, as the value of […]

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