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Match the following Capital Structure Theory with the implications for the debt equity mix for a given company. M&M no tax Bankruptcy Costs exist Signaling
Match the following Capital Structure Theory with the implications for the debt equity mix for a given company. M&M no tax Bankruptcy Costs exist Signaling Theory Trade-off Theory M&M with corporate taxes There is no optimal capital structure. Optimal capital structure is 100% debt. Optimal Capital Structure is mix of debt and equity Use debt when stock is undervalued and use equity when stock is overvalued. Other things equal, use less debt financing
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