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1) How do cost of funds and taxes affect decisions made by investors and the firm?...

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Finance

1) How do cost of funds and taxes affect decisions made byinvestors and the firm? Please explain 2) Since interest paymentsare fully deductible for tax purposes should a firm’s capitalstructure be all debt financed? Why & why not?

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1 Cost of funds and taxes affects decisions made by investors and the firms to a great extent Cost of funds include the cost of acquiring the funds that is common stock preference shares and debt There must be an optimum mix of all kind of funds The decision rest on the cost associated with various kind of funds Interest is    See Answer
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1) How do cost of funds and taxes affect decisions made byinvestors and the firm? Please explain 2) Since interest paymentsare fully deductible for tax purposes should a firm’s capitalstructure be all debt financed? Why & why not?

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