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8. All else equal, an all-equity company will have a lower risk when it introduces debt to its capital structure. 9. In the M&M theorem
8. All else equal, an all-equity company will have a lower risk when it introduces debt to its capital structure. 9. In the M&M theorem without taxes, a company in a higher tax bracket does NOT have stronger incentives to borrow money than another company in a lower tax bracket 10. M&M theory assumes that the bankruptcy cost is important in driving the capital structure decision
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