How to optimize firm-s capital structure policy

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Assume the good fairy can tell you exactly how to optimize both your firm's capital structure policy and your firm's dividend policy. Though good fairy wants to be good to you, he doesn't want to be too good and has offered to give you with optimal prescription for firm's capital structure policy OR firm's dividend policy, but NOT both. Based on what you know of potential gains to be had by each policy, which one would you select to optimize. Describe your reasoning.

Reference no: EM1397947

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