Question
Assume perfect capital markets. Since the debt claim is senior to the equity claim, debt is cheaper than equity. Therefore, a simple strategy to reduce
Assume perfect capital markets. Since the debt claim is senior to the equity claim, debt is cheaper than equity. Therefore, a simple strategy to reduce the cost of capital would be to take on as much debt as possible. DISCUSS this claim concisely.
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Theoretical Foundations For Quantitative Finance
Authors: Luca Spadafora, Gennady P Berman
1st Edition
9813202475, 978-9813202474
