Based on the Modigliani-Miller Theory and the Net Present Value Method Analyse the Impact of Corporate Finance on Corporate Performance

Zhiyuan Xie

2025

Abstract

In current business environment, the internal efficiency has been a significant factor for the performance of corporate. There is heterogeneity in corporate finance strategies and outcomes. In this paper we look at the complex relationship between how the finance of the corporation affects the performance of the corporation. The primary question that is examined is the extent to which financial decisions, such as capital structure and investment decisions, affect the profitability, growth, and survival prospects of firms in various industries and market environments. To counteract this problem, the research adopts a twotwey approach through both Modigliani-Miller (MM) theory and the Net Present Value (NPV) criterion as its theoretical basis. The research results show that corporate finance has a significant influence on company performance which varies from the effect on the industry level. However, limitations exist. The MM theories’ assumption of market perfection is hardly an actual case and the NPV faces practical problems like cash flows’ forecasts and the rate of return to be discounted.

Paper Citation

in Harvard Style

Xie Z. (2025). Based on the Modigliani-Miller Theory and the Net Present Value Method Analyse the Impact of Corporate Finance on Corporate Performance. In Proceedings of the 2nd International Conference on Engineering Management, Information Technology and Intelligence - Volume 1: EMITI; ISBN 978-989-758-792-4, SciTePress, pages 306-313. DOI: 10.5220/0014352100004718

in Bibtex Style

@conference{emiti25,
author={Zhiyuan Xie},
title={Based on the Modigliani-Miller Theory and the Net Present Value Method Analyse the Impact of Corporate Finance on Corporate Performance},
booktitle={Proceedings of the 2nd International Conference on Engineering Management, Information Technology and Intelligence - Volume 1: EMITI},
year={2025},
pages={306-313},
publisher={SciTePress},
organization={INSTICC},
doi={10.5220/0014352100004718},
isbn={978-989-758-792-4},
}

in EndNote Style

TY - CONF

JO - Proceedings of the 2nd International Conference on Engineering Management, Information Technology and Intelligence - Volume 1: EMITI
TI - Based on the Modigliani-Miller Theory and the Net Present Value Method Analyse the Impact of Corporate Finance on Corporate Performance
SN - 978-989-758-792-4
AU - Xie Z.
PY - 2025
SP - 306
EP - 313
DO - 10.5220/0014352100004718
PB - SciTePress