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Describe the factors that a company considers when choosing an optimal debt ratio. Which of these factors will inevitably limit the amount of debt a
- Describe the factors that a company considers when choosing an optimal debt ratio. Which of these factors will inevitably limit the amount of debt a company issues? What are the effects of leverage on equity beta (), WACC, and risk? What is the Trade-Off Theory and how does it affect the decision-making process? Generally speaking, why is debt cheaper than equity?
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