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Assume that a company in the early stages of growth has financed itself using only a very small percentage of debt in its capital structure.

Assume that a company in the early stages of growth has financed itself using only a very small percentage of debt in its capital structure. It pays no dividends to its shareholders. Do you expect this capital structure and dividend policy to be maintained over the life of the company as it grows and eventually matures? Clearly explain how the financing needs and of a newly established company are likely to change over time and how the appropriateness of the sources of funds changes as well.

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