Question: Consider the Higgins' five-factor model for financing decisions: Financial distress costs Tax shields Signaling Flexibility Management incentives A. Fast-growth firms: Which of the five factors

Consider the Higgins' five-factor model for financing decisions:

Financial distress costs
Tax shields
Signaling
Flexibility
Management incentives

A. Fast-growth firms: Which of the five factors listed above tend to be the most relevant considerations for setting the financing policy of a firm with persistent funding shortages? Support your answer by discussing either the Massey Ferguson or the MCI case assignments.

B. Mature firms: Which of the five factors listed above tend to be most relevant for setting the financing policy of a firm with persistent cash surpluses? Support your answer by discussing one of the Marriott, Congoleum, and Avaya case assignments.

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