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Cooperate Finance Question. Facebook, Inc. has no debt, by issuing debt Facebook can generate a very large tax shield potentially worth nearly RM 2 billion.

Cooperate Finance Question. Facebook, Inc. has no debt, by issuing debt Facebook can generate a very large tax shield potentially worth nearly RM2 billion. Given Facebooks success, one would be hard pressed to argue that Facebooks management are nave and unaware of this huge potential to create value. A more likely explanation is that issuing debt would entail other costs. What might these costs be?

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