# Irrelevance result

## A proposition by Modigliani and Miller which states that a firm cannot change the total value of its outstanding securities by changing its capital structure proportions. |

## A proposition by Modigliani and Miller which states that a firm cannot change the total value of its outstanding securities by changing its capital structure proportions. |

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Bankruptcy

State of being unable to pay debts. Thus, the ownership of the firm's assets is transferred from the stockholders to the bondholders.

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