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from a macroeconomic point of view is society better off if firms use more than zero...

from a macroeconomic point of view is society better off if firms use more than zero debt (up to some prudent limit?)

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From macroeconomic point of view it is better if firms use more than zero debt because it shall bring down the cost of capital. Upto a certain limit debt decreases the cost of capital. Hence the firms shall try to have debt at a limit when cost of capital is reduced and firms value is maximum. This shall lead to better value to shareholder as well as society. This shall also bring more efficiency in the capital market which again is beneficial for the society. Also using debt brings returns that have lesser deviation than an all equity firm.

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