Corporate Finance 10th page 554 Nos3

Capital structure Decisions Due to large losses incurred in the past several years,a a firm has $2 billion in tax loss carryforwards. This means that the next $2 billion of the firms's income will be free from corporate taxes. Security analysts estimate that it will take many years for the firm to generate $2 billion in earnings.The firm has a moderate amount of debt in its capital structure. The firm's CEO is deciding whether to issue debthe or equity to raise funds to finance and upcoming project. which method would you recommend? Why?