Read the following 4 Economist articles
(i) ‘Debt is Good for You’
(ii)‘Debtors Prison’ , which discuss the reasons for corporations’ increased use of debt financing, and subsequent concerns about excess borrowing.
(iii) ‘The Gods Strike Back’, pages 1 to 4 only.
(iv) ‘The world has not learned the lessons of the (2008) financial crisis’
Summarize and synthesize, in not more than three (3) pages, the contents of the articles, and conclude with an opinion on how the information you have read would affect your capital structure decisions as a financial manager (i.e. would you use less or more or less debt than suggested by the MM and Trade-off (static) models of capital structure), and why.
Include a justified assessment of how you think the recently implemented corporate tax rate reduction would impact your capital structure decisionsfkt.
