In 2020 the ABC Corporation had a debt to equity ratio = 1.29. Today the firm has a debt to equity ratio = 1.38. Clearly, this is a change in capital structure. In a world absent of taxes, this change

Group of answer choices

1. did not change the value of the firm

2. lowered the value of the firm

3. increased the value of the firm

In 2020 the ABC Corporation had a debt to equity ratio = 1.29. Today the firm has a debt to equity ratio = 1.38. Clearly, this is a change in capital structure. In a world where corporate tax rates rise from 21% to 28%, this additional leverage

Group of answer choices

A. lowers the value of the firm

B.adds value to the firm

c. does not change the firm's value