completa answers please 5 Answer the following questions based on the Figure 18 6 Provide at least 3 three examples of a how debt issuance makes management more disciplined b type of bankruptcy costs c what management does to reduce agency costs d way companies determine how much financial flexibility they have 5 Answer the following questions based on the Figure 18 6 Provide at least 3 three examples of a how debt issuance makes management more disciplined b type of bankruptcy costs c what management does to reduce agency costs d way companies determine how much financial flexibility they have 562 CHAPTER EIGHTEEN THE FINANCING MEN Stage 1 Stage 3 High Growth Stage 2 Rapid Expansion Start up bonussy Tax Benefits Added Discipline of Debt Bankruptcy Cost Agency Costs Need for Flexibility Net Tradeoff Zero, if losing money Low, as owners run the firm Very high Firm has no or negative eamings Very high, as firm has almost no assets Very high, as firm looks for ways to establish itself Costs exceed benefits Minimal debt Low, as earnings are lim ted Low Even if public, firm s closely held Very high Earnings are low and volatile High New investments are difficult to monitor High Expansion needs are large and unpredictable Costs still ikely to exceed benefits, Mostly equity Time Increase, with earnings increasing, as managers own less al firm High Earnings are increasing but still volatile High Lols of new investments and unistable sk Hich Expansion needs remain unpredictable Debt starts yielding nel benefits to the firm Stage 4 Mature Growth High High Managers are separated from owners Declining, as earnings from existing assets increase Declining, as assels in place become a larger portion of firm Low Firm has low and more predictable investment needs Debt becomes a more attractive option Stage 5 Decline Revenues Earnings High, but declining Declining, as firm does not take many new investments, Low, but increases as existing projects end Low Firm takes few new investments Nonexistent Firm has no new investment needs Debt will provide benefits

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completa answers please 5  Answer the following questions based on the Figure 18 6  Provide at least 3 three examples of  a  how debt issuance makes management more disciplined  b  type of bankruptcy costs  c  what management does to reduce agency costs  d  way companies determine how much financial flexibility they have  5  Answer the following questions based on the Figure 18 6  Provide at least 3 three examples of  a  how debt issuance makes management more disciplined  b  type of bankruptcy costs  c  what management does to reduce agency costs  d  way companies determine how much financial flexibility they have  562 CHAPTER EIGHTEEN THE FINANCING MEN Stage 1 Stage 3 High Growth Stage 2 Rapid Expansion Start up bonussy Tax Benefits Added Discipline of Debt Bankruptcy Cost Agency Costs Need for Flexibility Net Tradeoff Zero, if losing money  Low, as owners run the firm  Very high  Firm has no or negative eamings  Very high, as firm has almost no assets Very high, as firm looks for ways to establish itself  Costs exceed benefits Minimal debt Low, as earnings are lim ted Low  Even if public, firm s closely held Very high  Earnings are low and volatile High New investments are difficult to monitor High  Expansion needs are large and unpredictable  Costs still ikely to exceed benefits, Mostly equity  Time Increase, with earnings  increasing, as managers own less al firm High Earnings are increasing but still volatile High  Lols of new investments and unistable sk Hich  Expansion needs remain unpredictable Debt starts yielding nel benefits to the firm  Stage 4 Mature Growth High High  Managers are separated from owners  Declining, as earnings from existing assets increase Declining, as assels in place become a larger portion of firm Low Firm has low and more predictable investment needs  Debt becomes a more attractive option  Stage 5 Decline Revenues Earnings High, but declining  Declining, as firm does not take many new investments, Low, but increases as existing projects end  Low  Firm takes few new investments  Nonexistent Firm has no new investment needs  Debt will provide benefits

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completa answers please 5. Answer the following questions based on the Figure 18.6. Provide at least 3 three examples of: a. how debt issuance makes

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