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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:

  1. A 'perfect' world with no taxes, no transactions costs, symmetric information and no agency problems.
  2. Taxes
  3. High free cash flow, few investment opportunities
  4. Low free cash flow, high investment opportunities
  5. Agency problems
  6. Asymmetric information

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