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In a world with taxes and financial distress, when a firm is operating with the optimal capital structure the: Multiple Choice debt-equity ratio will be

In a world with taxes and financial distress, when a firm is operating with the optimal capital structure the:

Multiple Choice

  • debt-equity ratio will be minimized.

  • weighted average cost of capital will be maximized.

  • firm will be all-equity financed.

  • required return on assets will be at its maximum point.

  • overall benefits of debt have all been realized.

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