What is the effect of a repayment of debt on the firms value

Reference no: EM131243047

1. Does the debt/equity ratio of a firm change only with the firm's issuance and retirement of debt and equity.

2. What is the effect of a repayment of debt on the firm's value and on the firm's debt ratio in a perfect market?

3. If the world is not perfect, what is the likely effect of an equity issue on the firm's value and on the firm's debt ratio? How does it compare to the perfect-market scenario?

Reference no: EM131243047

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