"A firm can't use interest tax shields unless it has (taxable)income to shield." What does this statement imply for capital structure? Explain briefly,comparing the following two examples: a start-up biotech firm and an electric utility company.

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The Answer of "A firm can't use interest tax shields unless it has (taxable)income to shield." What does this statement imply for capital structure? Explain briefly,comparing the following two examples: a start-up biotech firm and an electric utility company.

"A Firm Can't Use Interest Tax Shields Unless It Has