1. Explain what capital structure theory attempts to do and demonstrate useful lessons that can be learned from capital structure theory. 2. Using the free cash flow valuation model, identify avenues...

1. Explain what capital structure theory attempts to do and demonstrate useful lessons that can be learned from capital structure theory.

2. Using the free cash flow valuation model, identify avenues by which capital structure can affect the weighted average cost of capital and firm value.

3. Explain the difference between financial risk and business risk? What factors influence a firm’s business and financial risk?