Which of the following influences a firm's choice of capital structure?

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All of the options mentioned (taxes, agency costs and benefits of leverage, signaling and adverse selection) influence a firm's choice of capital structure. Taxes can affect the cost of debt financing and make it a more attractive option. Agency costs and benefits of leverage refer to the potential conflicts of interest between a firm's shareholders and its management, as well as the potential benefits of using debt to incentivize management to act in the best interests of shareholders. Signaling and adverse selection refer to the potential information asymmetry between a firm and its investors, and the ways in which a firm's capital structure can signal its creditworthiness and risk level. All of these factors are important considerations for a firm when determining its optimal capital structure.

Which of the Following Influences a Firm's Choice of Capital