1. Although the use of debt provides tax benefits to the firm, debt also puts pressure on the firm to:
3. I)Make interest and principal payments, which if not met, can put the company into financial distress
4. II)Make dividend payments, which if not met can put the company into financial distress
5. III)Make dividend payments, which increase the firm cash flow
6. IV)Make increased tax payments, thereby increasing firm value
7. a.I only
8. b.II only
9. c.II and III only
10. d.III and IV only