The debt bubble legacy of economists Modigliani and Miller
Their research laid the intellectual groundwork for a dramatic erosion of corporate creditworthiness. 50 years ago, Franco Modigliani and Merton Miller argued that whether companies funded themselves with debt or equity was irrelevant, a concept for which they went on to win the Nobel Prize in economics. For Robin Wigglesworth, never has this insight been clearer than now, amid the wake of the coronavirus pandemic. In the Financial Times, he explains.
From Financial Times