The following statements about the static theory of capital structure are incorrect except: Multiple Choice...
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The following statements about the static theory of capital structure are incorrect except: Multiple Choice Firm value is decreased by the costs of financial distress Firm value is maximised where the debt-equity ratio equals 1. The firm optimizes its tax shield on debt at the optimal level of debt. O The optimal capital structure is where the firm has 100 percent debt. O When the tax rate is relatively low, the firms gets the largest benefit from using debt
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