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    junk bonds and capital structure

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    The development of the new issue junk bond market had important implications for capital structure choice. The existence of a viable junk bond market means that firms can comfortably maintain higher degrees of leverage than they could prior to the development of this market. Do you agree or disagree? Justify your answer.

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    This is completely false. Junk bonds are called so because of their higher risk of default. For an investor to be willing to take on such ...

    Solution Summary

    Describes the implications to a corporation when considering junk bonds as a component of their capital structure