According to the tax shield hypothesis,we should expect to find:
A) a negative relationship between companies with high non-debt tax shields and companies with low debt/equity ratios.
B) a positive relationship between companies with high non-debt tax shields and companies with high debt/equity ratios.
C) a positive relationship between companies with high non-debt tax shields and companies with low debt/equity ratios.
D) a positive relationship between companies with low non-debt tax shields and companies with low debt/equity ratios.
Correct Answer:
Verified
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