1. According to the static theory of capital structure, ____________________. (Can someone explain all answer choices)

   		a firm's choice of assets and operations is fixed for all time
   		a firm will borrow up to the point where the benefit from an extra dollar of debt is just equal to the tax benefit associated with that debt
   		the value of the firm will differ from the M&M value without taxes by the gain from leverage
   		the optimal WACC is the same as it is in M&M with taxes
   		the value of the firm in M&M with taxes is overstated by the amount of financial distress costs