1. Read the following article from the Heritage Foundation:

Taxation of Debt and Equity: Setting the Record Straight

The article argues that the preferential tax treatment of debt should be ended.

Do you agree? Why may the government prefer that firms be financed by debt rather than equity?

2. Mergers and Acquisitions may be Horizontal or Vertical.

In a Horizontal M&A a firm acquires another firm in a similar line of business (similar products).

In a Vertical M&A a firm acquires a supplier or a customer.

What sort of synergies that may increase the combined value of the acquirer and the target may be present in the two different kinds of M&A?