Stulz (1990) argues that capital structure choices can lead to both over- and under-investment. Both diversification and convertible debt have been suggested as possible solutions. With reference to any relevant literature discuss the problems identified by Stulz and how diversification and convertible debt can resolve them.

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Financial globalization is an inherent feature of todays economies But the positive impact of economic globalization has been limited and a few puzzling evidence has been found recently to elucidate t... View the full answer