Information asymmetry and agency problems change with different stages of the firm-cycle

Question 1. Fundamental Concepts

In your own words, discuss and evaluate the following statement based on your learning from our classes as well as your own insight and example(s).

Question 1 – Part A.

“According to the M- M Theorem, corporate financial decisions do not affect firm value when there is no capital market imperfection.”

True or False? Please explain your answer with example(s). Hint: review Topic #1presentation and recall our discussion in Week #2 meetings.

Question 1 – Part B.

“Information asymmetry and agency problems change with different stages of the firm-cycle.”

True or False? Please explain your answer with example(s). Hint: review Topic #1presentation and recall our discussion in Week #2 meetings.

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