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How leverage can improve returns to the shareholders

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Reference no: EM132073157

Question: Participation questions to answer for week five

1. Do you believe the stock market is efficient? If so, to what degree and why? If not, why not?

2. Explain the relevance of market efficiency for financial managers.

3. How would you define the optimal capital structure? Is it possible to achieve the optimal structure in a business?

4. Explain how leverage can improve returns to the shareholders.

5. Describe the impact of corporate taxes on the weighted average cost of capital.

6. What are some indications that a company has too much debt?

7. Describe agency costs and the impact on bondholders.

8. Explain the application and implications of the pecking-order theory.

Answer each question in 200 or more words.

Use citations and references.

Use APA guidelines please.

Reference no: EM132073157

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