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help A firm pays a corporate tax rate of 25%. The personal tax rates on income from stock and income from debt are 20% and

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A firm pays a corporate tax rate of 25%. The personal tax rates on income from stock and income from debt are 20% and 40% respectively. If markets are perfect except for these tax rates, the optimal capital structure for the firm is 100% equity 100% debt 50% debt and 50% equity indeterminate because in this case there is no optimal capital structure

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