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Gulf Petroleum & Jordanian Petroleum Refinery (JPR) are considering borrowing. Gulf has excellent prospects in terms of future projects, and is in area in which
Gulf Petroleum & Jordanian Petroleum Refinery (JPR) are considering borrowing. Gulf has excellent prospects in terms of future projects, and is in area in which cash flows are volatile and future needs are difficult to assess. JPR has more stable cash flows and fewer project opportunities & predict its future needs with more precision. Other things remaining equal, which of these two firms should borrow more? Why?
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