For each of the statements below, state whether you agree or disagree. This should be followed by a rationale (roughly a paragraph). Your justification should be grounded in corporate finance theory and a clear understanding of finance practice.

A: A company that does not borrow money cannot fail.

B: A company, that pays taxes, can reduce the cost of equity and the weighted average cost of capital by reducing the proportion of debt in its firm’s capital structure.

Save your time - order a paper!

Get your paper written from scratch within the tight deadline. Our service is a reliable solution to all your troubles. Place an order on any task and we will take care of it. You won’t have to worry about the quality and deadlines

Order Paper Now

C: The equation VL = VU + TD implies that if the government increased the marginal corporate tax rate, all levered firms would increase in value.

D: Since IPOs are typically under-priced, a strategy of applying for all issues (in equal amounts) is likely to produce substantial investment returns.

"Looking for a Similar Assignment? Get Expert Help at an Amazing Discount!"