The Tradeoff Theory suggests that . A. with higher costs of financial distress, it is optimal for a firm to choose higher leverage B. there is no rational explanation for why firms choose debt levels that are too low to fully exploit the debt tax shield C. differences in the magnitude of financial distress costs and the volatility of cash flows cannot explain the differences in the use of leverage across industries D. a firm should choose a debt level where the tax savings from increasing leverage are just offset by the increased probability of incurring the costs of financial distress

Multiple-choice questions have a special grading rule determined by your instructor. assume that your instructor has decided to grade these questions in the following way: if you submit an incorrect answer to a multiple-choice question with n options, you will lose 1/(nâ’1) of the credit for that question. just like the similar multiple-choice penalty on most standardized tests, this rule is necessary to prevent random guessing. if a multiple-choice question has five answer choices and you submit one wrong answer before getting the question correct, how much credit will you lose for that part of the question? multiple-choice questions have a special grading rule determined by your instructor. assume that your instructor has decided to grade these questions in the following way: if you submit an incorrect answer to a multiple-choice question with options, you will lose of the credit for that question. just like the similar multiple-choice penalty on most standardized tests, this rule is necessary to prevent random guessing. if a multiple-choice question has five answer choices and you submit one wrong answer before getting the question correct, how much credit will you lose for that part of the question? 100% 50% 33% 25% 20%