Please describe how changes in capital structure affect thevalue of the firm in a world with taxes and including the possiblecosts of financial distress. Is there an optimal capital structurefor a firm? Please discuss. Electric utilities have an average 60%debt/total capitalization ratio whereas software firms have debtratios close to zero. Why? Please explain the dividend policy thatyou would advise for a tech company to adopt that has very highbusiness risk. How do you financially evaluate an acquisition
