Question 1:
(a) Show the forces driving cross-border mergers that operate more strongly than the reasons for transactions that take place within a given country's border.
(b) What are two theoretical reasons why divestitures might create wealth?
Question 2:
(a) Explain the trade-off that defines the static theory of capital structure.
(b) Describe the pecking-order theory of capital structure and discuss the implications associated with it that are at odds with the trade-off theory.