Question: Answer any two of the following: a. There is no such thing as an optimal capital structure. Examine the validity of this statement on

Answer any two of the following: a. There is no such thing as an optimal capital structure. Examine the validity of this st

Answer any two of the following: a. "There is no such thing as an optimal capital structure". Examine the validity of this statement on academic theory and empirical evidence wherever possible. (12.5 marks) b. Outline the main principal-agent problem for corporations and discuss three mechanisms that can be employed to reduce it. (12.5 marks) c. Discuss the Fama-French models for determining the cost of equity and the challenges with using the models. (12.5 marks)

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Quiz a A common saying in finance is there is no such thing as an optimal capital structure It has been used to argue against specific positive results of changes in capital structure and overall effi... View full answer

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