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Do you agree with the following statement? Explain your a nswer. In a world with no taxes or finan cial distress costs, if a fir

Do you agree with the following

statement? Explain your a

nswer.

"In a world with no taxes or finan

cial distress costs, if a fir

m issues equity to pay off some of its

debt, the price of the shares will

increase because the shares

become less risky."

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