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If the present value of the tax shield equals the present value of the costs of financial distress, then the: A. Firm should increase its

If the present value of the tax shield equals the present value of the costs of financial distress, then the: A. Firm should increase its use of debt.

B. Firm is using the optimal level of debt. C. Firm is paying too high an interest rate. D. Firms market value equals the value of the unlevered firm.

.

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