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Answer all parts thoroughly thank you PartI i. According to the trade-off theory of capital structure, in a world with taxes and bankruptcy, as debt
Answer all parts thoroughly thank you PartI i. According to the trade-off theory of capital structure, in a world with taxes and bankruptcy, as debt increases... 18 a. PV(ax shield) at first increases, but then declines, while PV(costs of financial distress) increases. b. PV(tax shield) increases, while PV(costs of financial distress) at finst increases, but then declines. c. PV(tax shield) increases, and PV(costs of financial distress) increases. d. PV(tax shield) increases, while PV(costs of financisl distress) declines. The pecking-order theory of capital structures states that a firm should finance projects using.. ii. a. internal financing first, new debt next, new equity last. b. internal financing first, new equity next, new debt last. c. new equity first, new debt next, internal financing last d. new debt first, new equity next, internal financing last. iii. The x-axis in the picture below should be labeled... Cost of capital (%) WACC Ro x (1-T a. price-earnings ratio b. price-dividend ratio. c. book-to-market ratio d. debt-equity ratio
Answer all parts thoroughly thank you
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