Part a: Explain how a firm's choice of capital structure could help in mitigating the managerial moral

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Part a: Explain how a firm's choice of capital structure could help in mitigating the managerial moral hazard problem. [20 marks]

Part b: Consider a firm that is choosing its optimal capital structure according to the trade-off theory. What factors should that firm take into consideration when deciding to become highly levered or not? Provide a short explanation for each factor. [20 marks]

Posted Date: Jun 09, 2024 10:07 AM

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Part a: Explain how a firm's choice of capital structure could help in mitigating the managerial moral

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