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MC Qu. 39 If a firm has the optimal... If a firm has the optimal amount of debt, then the: A.)Value of the firm is

MC Qu. 39 If a firm has the optimal...

If a firm has the optimal amount of debt, then the:

A.)Value of the firm is equal to V_L + T_C D.

B.)Value of the firm is minimized.

C.)Debt-equity ratio is equal to 1.

D.)Direct financial distress costs must equal the present value of the interest tax shield.

E.)Value of the levered firm will exceed the value of the firm if it were unlevered.

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