How much borrowing

##ANSWER ALL 4 PARTS PLEASE AND GIVE DETAILED EXPLANATION

a) Identify the costs of financial distress. Consider both bankruptcy related costs and the costs associated with distorted decision-taking. Describe how these costs are incurred, and explain how they will impact on company value. Use examples that will demonstrate your points.

b)Describe financial distress, and Identify associated costs. Illustrate the types of cost, explain how they are incurred, and suggest how they can impact on company value. Consider both bankruptcy costs and the cost of distorted decision-taking.

c)Briefly explain the pecking order theory of capital structure.

d) Modigliani and Miller propose that any decision regarding the amount of debt capital will not impact on company value. Outline the assumptions behind their proposal, and explain how a trade-off between leverage and risk will ensure that share price is unaffected. Conclude with a comparison between their ideas and the traditional view of borrowing and the cost of capital. (10 Marks)