"Think of the firm as a gigantic tub of whole milk. The farmer can sell the whole milk as it is. Or he can separate out the cream, and sell it at a considerably higher price than the whole milk would bring. But, of course, what the farmer would have left would be skim milk, with low butter-fat content, and that would sell for much less than whole milk. The Modigliani-Miller proposition says that if there were no cost of separation , the cream plus the skim milk would bring the same price as the whole milk."

“What is the "cost of capital" to a, firm in a world in which funds are used to acquire assets whose yields are uncertain; and in which capital can be obtained by many different media, ranging from pure debt instruments, representing money-fixed claims, to pure equity issues, giving holders only the right to a pro-rata share in the uncertain venture? This question has vexed at least three classes of economists: the corporation finance specialist concerned with the techniques of financing firms so as to ensure their survival and growth; the managerial economist concerned with capital budgeting; and the economic theorist concerned with explaining investment behavior at both the micro and macro levels.”

“When I started worrying about stocks, it was the late 1930s and early 1940s and it didn't seem like a good way to make money then, either.”

“What counts is what you do with your money, not where it came from.”

“Most people might just as well buy a share of the whole market, which pools all the information, than delude themselves into thinking they know something the market doesn't.”