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In the context of the trade-off theory of capital structure, explain how each of the following would affect the firms optimal choice of capital structure:

In the context of the trade-off theory of capital structure, explain how each of the following would affect the firms optimal choice of capital structure: (i) an increase in the marginal tax rate, (ii) the firm has more tangible assets, (iii) the firm is a monopolist in its product market.

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