Explain pls in clear and simple steps

Optimal Capital Structure Theory (cont'd) Static Trade-off Theory (cont'd) With Corporate Taxes, Bankruptcy Cost, and Agency Cost Value of firm (V) =l'e +1,0 | Cost ofcapital: R(96) /Rs Present value of tax shield on debt Max mum firmivalue Actual value of firm Value of firm with no debt Present value of financial distress costs RB B' B Debt-to-equity Ratio Debt-to-equity Ratio Optimal amount of debt