Business, 09.12.2021 16:00 trillsmith

. Suppose we are in perfect capital markets. If an all equity (i. e. unlevered) firm decides to issue long-debt so that its debt to total assets ratio is 2/3, then what is the arbitrage trading strategy that we should pursue to replicate the return on equity of the levered firm

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. Suppose we are in perfect capital markets. If an all equity (i. e. unlevered) firm decides to issu...