Consider a government$-$sponsored project that guarantees $$350$ in one period.

Cost of investment is $$300($the firm only has $$200$ now$),$ so the stockholders will have to supply an additional $$100$ to finance the project.

Required return is $10$ percent. Should you accept or reject the government project?

$2)$Can Costs of Debt Be Reduced?

$3)$ Discuss the $$Tax Effects and Financial Distress$$

$4)$ Define the $$Signaling$$ as investors view debt as a $$signal of firm value$$

$5)$ Present the $$Agency Cost of Equity$$