Sometimes the line between debt and equity Is a fine one. In the early 1990s, the FASB asked the following question: "Should the sharp distinction between labilitles and equity be effectively eliminated?" If removed, the distinction would be erased and the move would prove consistent with entity theory of equity. That Is, the concept of the capital structure or the mix between debt and equity is not Important and Irrelevant to decision-makers and other users of financlal reports.

What is your opinion on eliminating the distinction between debt and equity? Are you for the elimination or against the elimination? Make sure to provide substantive evidence to support your argument and also provide

reference to the entity theory of equity and the finance theory that stipulates capital structure is not relevant.