In addition to the tax shield offered by the federal government, debt has a lower required rate of return than equity. Why don't firms have larger debt components in their capital structure than what is commonly observed?

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The Answer of In addition to the tax shield offered by the federal government, debt has a lower required rate of return than equity. Why don't firms have larger debt components in their capital structure than what is commonly observed?

In Addition to the Tax Shield Offered by the Federal