TY  - JOUR
AU  - Titman,Sheridan
TI  - The Modigliani and Miller Theorem and Market Efficiency
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 8641
PY  - 2001
Y2  - December 2001
UR  - http://www.nber.org/papers/w8641
L1  - http://www.nber.org/papers/w8641.pdf
N1  - Author contact info:
Sheridan Titman
Finance Department
McCombs School of Business
University of Texas at Austin
Austin, TX 78712-1179
Tel: 512/232-2787
Fax: 512/471-5073
E-Mail: titman@mail.utexas.edu
AB  - Most of the recent literature on risk management and capital structure assumes that markets are perfect, i.e., efficient and complete. This paper presents anecdotal evidence that suggests that different capital markets (e.g., debt, equity and warrants markets) may not be perfectly integrated, and discusses the implications of this lack of integration on financing strategies. I argue that although models that assume perfect markets are sufficient to explain cross-sectional differences in financing and risk management choices within an economy, that issues relating to market conditions may be necessary to explain differences in these choices across countries and across time.
ER  -