When a firm is operating at its target capital structure point, the total value of the firm is maximized.
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Q7: Tax rate will affect the optimal level
Q8: When a firm is operating at its
Q9: Volatility of earnings will affect the optimal
Q10: When EBIT is positive, increasing financial leverage
Q11: Assume there are no personal or corporate
Q13: Ignoring financial distress costs, borrowing money decreases
Q14: Nature of assets will affect the optimal
Q16: When a firm is operating at its
Q17: Suppose we wish to draw a graph
Q19: It appears that, capital structures vary quite
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