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In a world with corporate taxes, the market value of a firm's assets can increase hrough the introduction of debt into the firm's capital structure.

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In a world with corporate taxes, the market value of a firm's assets can increase hrough the introduction of debt into the firm's capital structure. In no more than 6 lines, comment on this statement. [4 marks) The empirical evidence concerning financing decisions made by firms supports the idea that financing decisions are made randomly by firms with no real impact on firm value. In no more than 6 lines, comment on this statement. [4 marks]

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