Question: I have a new situation: Bob is a financial analyst. He used to work for company A. Bob noticed that company A is mostly financed by debt. Recently, he changed job and now working as a financial analyst for another company, company B. Company B has completely different culture than company A. Company B is mostly financed by equity. But I can use this background: The trade-off theory of capital structure is the idea that a company chooses how much debt finance and how much equity finance to use by balancing the costs and benefits. The classical version of the hypothesis goes back to Kraus and Litzenberger[1] who considered a balance between the dead-weight costs of bankruptcy and the tax saving benefits of debt. Often agency costs are also included in the balance. This theory is often set up as a competitor theory to the pecking order theory of capital structure. A review of the literature is provided by Frank and Goyal.[2] An important purpose of the theory is to explain the fact that corporations usually are financed partly with debt and partly with equity. It states that there is an advantage to financing with debt, the tax benefits of debt and there is a cost of financing with debt, the costs of financial distress including bankruptcy costs of debt and non-bankruptcy costs (e.g. staff leaving, suppliers demanding disadvantageous payment terms, bondholder/stockholder infighting, etc.). The marginal benefit of further increases in debt declines as debt increases, while the marginal cost increases, so that a firm that is optimizing its overall value will focus on this trade-off when choosing how much debt and equity to use for financing. What is an answer for this question: Would company B have or not have tax benefits of debt?
Answer: not have

Question: I have a new situation: Two friends met after 20 years and had a beer together. Vlad was a geologist and studied earthquakes. Mort was a pedologist and studied soils. They had some interesting conversations that night. But I can use this background: Geologists study earthquake waves to "see" Earth's interior. Waves of energy radiate out from an earthquake's focus. These waves are called seismic waves ( Figure below ). Seismic waves go different speeds through different materials. They change speed when they go from one type of material to another. This causes them to bend. Some seismic waves do not travel through liquids or gases. They just stop. Scientists use information from seismic waves to understand what makes up the Earth's interior. What is an answer for this question: Which friend studied more about waves of energy radiating out from an earthquake's focus?
Answer: Vlad

Question: I have a new situation: A team of archaeologists studied two human settlements, village Alpha from about 11000 years ago and village Beta, which existed 9000 years ago. Village Beta was bigger, because their inhabitants already knew about and practiced agriculture. But I can use this background: Human beings invented agriculture about 10,000 years ago. This provided a bigger, more dependable food supply. It also allowed people to settle down in villages and cities for the first time. Birth rates went up because there was more food and settled life had other advantages. Death rates also rose because of crowded living conditions and diseases that spread from domestic animals. Because the higher birth rates were matched by higher death rates, the human population continued to grow very slowly. What is an answer for this question: Which village was more exposed to diseases because of crowded living conditions?
Answer:
Beta