There are several reasons why the capital structure (that is, the relative size of debt and equity) may affect the value of the firm. These include (I) the taxadvantage of debt, (II) bankruptcy-cost, (III) agency cost of equity, (IV) agency cost of debt and (V) asymmetric information. [a] For all five reasons, discuss whether (and –if so- under what circumstances) they lead to recommending debt over equity. [b] Assess the debt (as a % assets) of two listed companies (so companies the shares of which are traded on the stock exchange) in a recent year (2014 or 2015). This is readily available in annual reports. Discuss why the debt-levels for the two companies differ (or if they are similar, why they don’t differ). You may use the arguments of [1a], but you may also use other arguments.