Revision question. please answer a b c

The chief financial officer, Jacque Boss, of \"Le Cerf Volant Ltd\" has scheduled a meeting with his managers in an attempt to determine the optimal capital structure of the company. Dhristhy, one of the managers maintains that the company should opt solely for debt financing. She argues that 100% debt will maximize the value of the firm and simultaneously minimize the cost of capital. However, Donald, another manager, does not agree with Dhristy. Donald warns everyone that too much debt would be detrimental due to the costs associated with it. Donald also argues that it is important for companies to set a target capital structure and to never deviate from the set target as this guarantees maximum benefits. (a) Dhristhy believes in which theory / theories of capital structure? Clearly justify your answer by critically evaluating the theory/ theories. (b) Is Donald right to warn everyone about a capital structure consisting of 100 % debt? Clearly justify your answer and provide a critical appraisal on how much debt would be appropriate. (c) Donald argues that companies should never deviate from the target capital structure. Critically appraise this statement in light of the comments presented