When Firms Issue More Debt,the Tax Shield on Debt _____,The

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; increase; increase
B) decreases; decrease; decrease
C) increases; increase; decrease
D) decreases; decrease; increase
E) increases; decrease; decrease