Discuss modigliani and miller's propositions i in a world with corporate tax but no other market frictions nor distress costs. list the basic assumptions, results, and intuition of the model.
based on this model, if the original unlevered firm value is $100 million, the corporate tax rate is 20%, and the cfo is planning to carry out a leveraged recapitalization to add a permanent debt of $30 million. the interest rate for the debt is 6% for the coming year. the unlevered equity requires 10% annual return. what’s the levered firm value? what’s the value of levered equity?

mark, a civil engineer, entered into a contract with david. as per the contract, mark agreed to design and build a house for david for a specified fee. mark provided david with an estimation of the total cost and the contract was mutually agreed upon. however, during construction, when mark increased the price due to a miscalculation on his part, david refused to pay the amount. this scenario is an example of a mistake.

David consumes two things: gasoline (g) and bread (b). david's utility function is u(g, b) = 10g^0.25 b^0.75. use the lagrange technique to solve for david's optimal choices of gasoline and bread as a function of the price of gasoline, p_g, the price of bread, p_b, and his income m. with recent decrease in the price of gasoline (maybe due to external shock such as shale gas production) does david increase his consumption of gasoline? for david, how does partial differential g/partial differential p_g depend on his income m? that is, how does david's change in gasoline consumption due to an increase in the price of gasoline depend on his income level? to answer these questions, find the cross-partial derivative, |partial differential^2 g/partial differential m partial differential p_g.

What are six resources for you decide which type of business to start and how to start it?