Multiple Choice
If a company has the optimal amount of debt, then the:
A) direct financial distress costs must equal the present value of the interest tax shield.
B) value of the levered company will exceed the value of the unlevered company.
C) company has no financial distress costs.
D) Value of the firm is equal to VL + TCD.
E) debt-equity ratio is equal to 1.
Correct Answer:
Verified
Correct Answer:
Verified
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