Question: a. Please explain the optimal debt ratio for a firm and what causes the optimal amount of debt to be higher or lower for different

a. Please explain the optimal debt ratio for a firm and what causes the optimal amount of debt to be higher or lower for different firms?

b. Does a firm that previously did not pay a dividend and then started to pay a dividend increase, decrease or have no impact on the value of the firms stock, all else staying the same? Please explain.

c. How do you evaluate the valuation impact on a firm from a potential acquisition of another firm?

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