Business, 09.08.2021 22:40 hernandezbrandon059

In a world with taxes and financial distress, when a firm is operating with the optimal capital structure: I. the debt-equity ratio will also be optimal. II. the weighted average cost of capital will be at its minimal point. III. the required return on assets will be at its maximum point. IV. the increased benefit from additional debt is equal to the increased bankruptcy costs of that debt.

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In a world with taxes and financial distress, when a firm is operating with the optimal capital stru...