Q1.1. According to the traditional approach, there is an exact mix of equity and debt at this level market value of the company is maximum. Explain a basic numerical example briefly.

Q1.2. The value of the firm depends neither on its dividend policy nor its decision to raise capital by issuing stock or selling debt... Explain the theorem briefly, that is often called the capital structure irrelevance principle.

Q1.3. Why most small and medium-sized businesses use factoring, despite its relatively higher cost compared to the other alternatives?