... irrelevant. Only investment has priority, financing decisions as a support. Thus investment decisions and financing decisions bring us to think about profitability and borrowing (debt, leverage) respectively. Both of the investment decisions and financing decisions, they are worth to take time in considering the issue in term of tax, risk, asset type, managers' behaviour and rationality of investors. Steward C. Myers stated that firms generally try to search an adequate debt (leverage) proportion to maximize market value firm, but MM's proposition I argue that "if capital markets are doing their job, all the effort trying to increase value by tinkering with capital structure are fruitless". Steward C. Myers also stated about financing decision that there is a positive relationship between profitability and leverage which, on the one hand, has a consensus with static tradeoff theory. On the other hand, in contrast, Care Kester (1986) find that, within an industry, the most profitable ...

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