The risk both of the firm equity and debt

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Reference no: EM132072744

1. In a world of perfect financial markets (but not necessarily product markets), is the cost of capital of the firm independent of how it is operated and financed?

2. If a change in capital structure increases the risk both of the firm’s equity and debt, and there are no other financial claims, does it imply that the firm’s risk has increased?

Reference no: EM132072744

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