Which of the following statements regarding capital structure decisions in a world with taxes is true?
A) Even if the same amount of investment dollars is required, one project may offer a higher tax shelter than another project.
B) Firms with higher marginal tax rates will not receive as much benefit from using debt as firms with lower marginal tax rates.
C) Even in a world with taxes, the investment and financing decisions can remain separate.
D) None of the above is a true statement.
Correct Answer:
Verified
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