According to the Tradeoff Theory of capital structure, increasing leverage will: increase the present value of the tax shield and decrease the probability of financial distress increase expected financial distress costs and decrease the present value of the tax shield ) increase the present value of the tax shield and decrease expected financial distress costs decrease expected financial distress costs and decrease the present value of the tax shield decrease the present value of the tax shield and decrease the probability of financial distress increase expected financial distress costs and increase the present value of the tax shield