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How can a company incur costs of financial distress

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Reference no: EM132531525

Question 1: How can a company incur costs of financial distress without ever going bankrupt. What is the nature of these costs?

Question 2: Further, why might it make sense for a mature, slow growth company to have a high debt ratio?How does the M&M Theory of Irrelevance play a role in a company's decision regarding its capital structure?

Question 3: Is M&M applicable in the real world or is it only relevant in the realm of academia?

Reference no: EM132531525

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