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14. Explain how the following factors would influence the use of debt by a company: A 'perfect' world with no taxes, no transactions costs, symmetric

14. Explain how the following factors would influence the use of debt by a company:

A 'perfect' world with no taxes, no transactions costs, symmetric information and no agency problems.

Taxes

High free cash flow, few investment opportunities

Low free cash flow, high investment opportunities

Agency problems

Asymmetric information

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