(Answered) 1 in a world with no taxes no transaction costs and no

Management Studies

1) in a world with no taxes, no transaction costs, and no costs of financial distress, is the following statement true, false or uncertain? Moderate borrowing will not increase the required return on a firm's equity. Explain.

2) As mentioned in the text,some firms have filed for bankruptcy because of actual or likely litigation-related losses. Is this a proper use of the bankruptcy process?

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