You are an investment banker who has a meeting today. The client is requesting your services in determining the optimal capital structure for the firms. Describe whether you would recommend that the firm choose leverage which is less than, about the same as, or greater than the average across all firms. Explain your reasoning fully.

a)Your morning meeting is with the CEO of a cosmetics company.This firm has taken some time to get going and still possesses some tax loss carry forwards.But customers have really taken to their unique products and now they are generating great profitability and have very attractive growth opportunities in the pipeline.Nonetheless, investors are concerned that the CEO could switch into a range of investments, some of which could be quite risky.