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Explain theories (debt vs. equity) that describe optimal decision-making for capitalizing firms. What are the best ways to distribute money to shareholders (cash dividends, stock

Explain theories (debt vs. equity) that describe optimal decision-making for capitalizing firms.

What are the best ways to distribute money to shareholders (cash dividends, stock repurchases, special dividends etc.)?

Things to consider: taxes (personal and corporate), projected growth of the company, expected profitability of the future projects, market conditions (level of interest rates and level of company's stock price etc).

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