Question: 12. We have discussed three basic theories of capital structure (irrelevance, pecking order, and static tradeoff). a. What is the difference in the way managers

12.

We have discussed three basic theories of capital structure (irrelevance, pecking order, and static tradeoff).

a. What is the difference in the way managers will behave regarding their capital structure decisions in each of these theories. Explain fully.

b. Describe in detail how the static tradeoff theory works and what management will consider when making the capital structure decision in this context.

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