Consider a Firm Whose Capital Structure Includes Both Debt and Equity.If

Multiple Choice

Consider a firm whose capital structure includes both debt and equity.If the firm must pay taxes in a given year,which of the following has the highest value?

A) The value of the unlevered firm.
B) The value of the levered firm.
C) The value of the firm's debt.
D) The value of the firm's equity.
E) The value of the interest tax shield.