1) The document discusses capital structure theories and the effect of leverage on firm value. It outlines Modigliani-Miller's propositions with and without taxes. 2) According to MM, in a world without taxes, capital structure does not affect firm value but increases risk for shareholders. With taxes, firm value increases with leverage due to interest tax shields. 3) The document also discusses how shareholders can achieve the same returns as a levered firm through "homemade leverage" by borrowing personally.