Multiple Choice
When firms issue more debt, the tax shield on debt _____, the agency costs on debt (i.e., costs of financial distress) _____, and the agency costs on equity _____.
A) increases; increases; increases
B) decreases; decreases; decreases
C) increases; increases; decreases
D) decreases; decreases; increases
E) increases; decreases; decreases
Correct Answer:
Verified
Correct Answer:
Verified
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