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Assume that an economy exists where there are no taxes, there are no additional costs when a firm gets into financial distress, there is no
Assume that an economy exists where there are no taxes, there are no additional costs when a firm gets into financial distress, there is no asymmetric information between investors and corporate management, and management is well-incentivized such that it is always working hard to maximize shareholder value. In such an economy, a firm exists that has no debt in its capital structure. This firm's weighted average cost of capital will likely go down if the firm issues debt and buys back shares of stock. O True O False
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