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If a firm has the optimal amount of debt, then the: Value of the levered firm will exceed the value of the firm if it
If a firm has the optimal amount of debt, then the:
| Value of the levered firm will exceed the value of the firm if it were unlevered. |
| Value of the firm is equal to VL + TC D. |
| Debt-equity ratio is equal to 1. |
| Value of the firm is minimized. |
| Direct financial distress costs must equal the present value of the interest tax shield. |
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Money Banking And Financial Markets
Authors: Stephen Cecchetti, Kermit Schoenholtz
3rd Edition
007337590X, 9780073375908
