Question
(a) (i) Read the two Economist articles entitled Debt is Good for You (dated 01/25/2001) and Debtors Prison (dated 02/09/2009), which discuss the reasons for
(a) (i) Read the two Economist articles entitled Debt is Good for You (dated 01/25/2001) and Debtors Prison (dated 02/09/2009), which discuss the reasons for corporations increased use of debt financing, and subsequent concerns about excess borrowing. (ii) Summarize and synthesize, in not more than two (2) pages, the contents of the articles, and conclude with an opinion on how the information you have read would affect your capital structure decisions as a financial manager (i.e. would you use less or more or less debt than suggested by the MM and Trade-off (static) models of capital structure), and why.
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