a) Should company issue bonds to repurchase the shares and if it is appropriate if we can use ONLY earnings per share in our capital structure decision.
b) do you agree that firms with high operating leverage will tend to have a high financial leverage. analyse the statement
c) shareholders of a firm are eligible to receive dividends when declared while bondholders are eligible to receive interest payments which is mandatory. based on this. shares are considered as riskier compared to bonds and the required rate of return on shares is higher than that on bonds. however, in reality, bondholders face more risk than shareholders.. examine how this could happen and how the impact could be reduced.