Question 1. Discuss types and sources of corporate debt and bond covenants.
Question 2. Discuss the pros and cons of debt financing. Provide examples.
Question 3. Discuss factors that influence the firm's choice of capital structure. Describe how taxes affect the choice of debt versus equity.
Question 4. Explain what is meant by "indirect costs of financial distress."
Question 5. Discuss how leverage can alter the incentives of managers. Provide examples.