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Kongs Plc has 100,000,000 in equity and 20,000,000 in debt. The corporate tax rate is 15%. Should the firm increase the debt level and if

Kongs Plc has 100,000,000 in equity and 20,000,000 in debt. The corporate tax rate is 15%. Should the firm increase the debt level and if so, to what extent should it raise the debt? Please explain to him with referring to the M&M propositions and static theory.

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