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b) Leverage is a fair-weather friend. In light of this, indicate when a company should or should not use financial leverage. (1 mark) Briefly answer

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b) "Leverage is a fair-weather friend". In light of this, indicate when a company should or should not use financial leverage. (1 mark) Briefly answer the following questions: i) What is capital restructuring? (1 mark) ii) The signalling theory assumes the existence of asymmetric information. Discuss this statement. (2 marks) iii) How is a merger different from consolidation? (2 marks) Total 5 marks

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