the main aim of effective capital structure is to maximize the value of the firms and reduce the cost of capital.

True b. False

Leverage can be defined as a purchase of an asset by expecting that the profit generated from the use of such an asset will be more than the cost of debt.

True b. False

Discuss the following capital structure and their assumptions (slide 17,20,25)

Traditional theory

Net income theory

Net operating theory

Define the following type of leverage (slide 35,38)

Operational leverage

Financial leverage