Which of the following makes this a true statement? In this slightly more realistic world with corporate taxes, managers can:

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In a world with corporate taxes, debt financing provides a tax shield because interest payments are tax-deductible. This reduces the firm's taxable income, leading to lower taxes and potentially increasing the firm's value. Therefore, taking on as much debt as possible can, in theory, maximize the firm's value due to the tax benefits associated with debt financing.

Which of the Following Makes This a True Statement? in This