Download or read book On Portfolio Analysis, Market Equilibrium and Corporation Finance with Incomplete Information written by Mondher Bellalah and published by . This book was released on 2005 with total page 18 pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper presents a new derivation of the Modigliani and Miller (1958, 1963, 1966) propositions using the simple model of capital market equilibrium with incomplete information presented in Merton (1987). The model is used to relate the maximization of stockholder expected utility to the selection of assets and to the financing and investment decisions within firms in a context of incomplete information. Expressions of the cost of capital are presented with and without corporate taxes in the presence of shadow costs of incomplete information.