Debt or equity to finance the firm redevelopment investment

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Reference no: EM131186295

During the last few years, many companies have suffered major trading losses because of the poor economic climate. Assume your firm has found itself in this situation and is considering a major redevelopment investment to exploit growth opportunities. Due to large losses incurred in recent years, your firm has significant tax loss carry-forwards, which means that it does not need to pay any tax for 3 years. Should you use debt or equity to finance the firm's redevelopment investment? Explain your choice.

Reference no: EM131186295

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