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For each of the following theories, describe what the theory says about the question, Is financial slack valuable for the firm? Why or why not?

For each of the following theories, describe what the theory says about the question, Is financial slack valuable for the firm? Why or why not?

a) According to Modigliani & Miller, is financial slack valuable for the firm? Why or why not?

b) According to Tradeoff Theory, is financial slack valuable for the firm? Why or why not?

c) According to Pecking Order Theory is financial slack valuable for the firm? Why or why not?

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