Optimal capital structure as per the static trade-off theory

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Reference no: EM13970731

The use of debt in the capital structure of a company increases leverage. Leverage can be effectively used to increase the returns available to the shareholders.

(a) Critically evaluate showing examples the use of debt financing and leverage in the capital structure of a company.

(b) Discuss the optimal capital structure as per the static trade-off theory.

Reference no: EM13970731

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