申論題

1. (15 points) Capital structure overlooks that firms have different capital requirements across their life cycle. In addition, the finance literature highlights various theoretical models that explain how the firms' life stages influence capital struc cture decisions, such as the Pecking Order, Trade-Off, and Agency Cost Theories. We like to know how firms in highly innovative industries have' different capital requirements over their life cycle.

(3) (5 points) Tony Lin is a founder of a highly innovative company. The company is facing a high-growth period. Tony insists to use debt financing to support the firm's new investment. Does Tony make the right decision? Why, or why not? Why does Tony make such a decision? Is there anything related to his personal preference?