Question: Id ont know from which topic ar chapter this is (b) Company XYZ Ltd's business is in the travel industry. They have experienced significant financial

Id ont know from which topic ar chapter this is

(b) Company XYZ Ltd's business is in the travel industry. They have experienced significant financial losses as a result of COVID-19. These financial losses have caused the company to defer payments of dividends to shareholders in order to conserve cash and the sale of many of its retail outlets to generate cash flow to support operating payments as a result. Using relevant theory from your leaming materials, explain the impact of increased financial distress costs on the value of XYZ Ltd. What would be the optimal level of XYZ's debt in their capital structure? (10 marks)

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