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Corporate Financial Management: (a) Compare and contrast Trade-off Theory and Signaling Theory in capital structure. (13 marks) (b) Critically discuss over-investment and under-investment problems due

Corporate Financial Management:

(a) Compare and contrast Trade-off Theory and Signaling Theory in capital structure.

(13 marks)

(b) Critically discuss over-investment and under-investment problems due to debt usage. What kinds of capital structures could prevent such problems?

(12 marks)

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