a) What are the main factors affecting a company's capital structure as suggested by the trade-off theory and the pecking order theory? Explain how these factors shape a company's capital structure decisions.

b) How does an increase in financial leverage affect a company's cost of debt and cost of equity? Explain in details.

c) Why might shareholders prefer rights issue to private placement as a method of capital raising?

) What are the characteristics of off-market share buybacks in Australia? Why would shareholders participate in the buyback when the buyback price is set at below the market price?