Miller, Merton

Miller and Merton are two influential thinkers in finance, particularly regarding how investors and firms make decisions under uncertainty. Miller's work emphasizes the importance of financial structure—how debt and equity are balanced—and its impact on firm value and risk. Merton developed a model applying option pricing theory to assess corporate debt and equity, viewing company assets as options that can be worth more or less depending on market conditions. Both contribute to understanding the dynamic relationship between risk, leverage, and valuation, guiding how companies manage their capital and how investors evaluate financial risks.