Which of the following statements is FALSE?
A) If there is uncertainty regarding EBIT,then with a higher interest expense there is a greater risk that interest will exceed EBIT.
B) Even for a firm with positive earnings,growth will affect the optimal leverage ratio.
C) From a tax perspective,the firm's optimal level of debt is proportional to its current earnings.
D) The optimal proportion of debt in the firm's capital structure will be higher,the higher the firm's growth rate.
Correct Answer:
Verified
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