Question

1. How traditional theory is different from alternative theory? in Managerial Economics​

Answer 1

Answer:

Traditional theory is different from Alternative theory

Explanation:

According to the conventional capital structure theory, a firm's value rises until it reaches a certain amount of debt capital, after which it continues to remain stable, gradually declining if there is too much borrowing.

Overleveraging causes this fall in value after the debt tipping point.

Alternative  Theory

A series of statements or principles developed to explain a set of facts or phenomena, particularly one that has been repeatedly tested or is generally accepted and can be used to forecast natural phenomena.