1. Corporate leaders usually find themselves at a cross-road regarding the decision on whether to engage in leverage to boost the firm value as this is a double-edge sword situation. More debt in the capital structure can raise the value of a firm and that same debt can reduce the value of a firm.

Explain the validity or otherwise of the above assertion and if possible anchor your discussion on the Trade-off Theory as postulated by Modigliani and Miller-1963.

In the course of your discussion, offer guidance on the existence or otherwise of an optimal capital structure as a way of alleviating the decision jargon that corporate leaders have to deal with.