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A) Briefly describe two types of distorted decision making that can occur when a firm is nearing default. B) Explain how the static trade-off model
A) Briefly describe two types of distorted decision making that can occur when a firm is nearing default. B) Explain how the static trade-off model can be used to find an optimal capital structure C) Which capital structure model can explain how managers should make capital structure decisions if they have private information about the firm? Briefly describe how a manager should make capital structure decisions in such a model.
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