Bob Joe, the manager of Farm Works, is analyzing the capital structure of the company...
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Finance
Bob Joe, the manager of Farm Works, is analyzing the capital structure of the company in order to determine the optimal debt choice. The amount of debt selected would be a permanent amount, however the higher the amount of leverage the higher the financial distress costs become. The cost of debt is 6% and the corporate tax rate of this company is 35%. What is the optimal debt choice for Farm Works?
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