Capital Markets Assignment

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Read the following paper:

 

Optimal Debt Mix and Priority Structure: The Role of Bargaining Power* by Dirk Hackbarth, Christopher A. Hennessy, & Hayne E. Leland. April 25, 2002
http://www.haas.berkeley.edu/groups/finance/Mix7C.pdf

 

Enter the discussion by posting your answers to the following questions (1-2 page essay):

 

  1. Why is it optimal for small firms to avoid public debt markets?
  2. Why do firms shift from bank debt into a mixture of bond market and bank debt over their life-cycle?

Conduct additional research necessary to support your discussion statements. Cite all sources of information you use. All written assignments and responses should follow APA rules for attributing sources.

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