Optimal mix of debt and equity in capital structure


Question: Based on Trade Off Theory and Pecking Order Theory, discuss how the optimal mix of debt and equity in capital structure is attained where there is a trade-off between the expected benefits and costs of debt financing.

- Compare Pecking Order Theory and Trade Off Theory
- How do Pecking Order Theory and Trade Off Theory relate to optimal leverage?

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Other Management: Optimal mix of debt and equity in capital structure
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