Why is the value of a geared company higher than an ungeared company under the mm-with - tax - model?

Under the Modigliani-Miller theorem with taxes, a geared company (one that uses debt financing) has a higher value than an ungeared company because the interest on debt is tax-deductible. This tax shield effectively lowers the overall tax burden of the geared company, increasing its cash flows and overall value. Additionally, the use of debt can enhance returns on equity, making geared firms more attractive to investors. Thus, the benefits from the tax shield contribute significantly to the higher valuation of geared companies.