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Please explain this chart in detail Optimal Capital Structure is achieved where MB = MC of bond financing Optimal Capital Structure is achieved where MBMC

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Please explain this chart in detail

Optimal Capital Structure is achieved where MB = MC of bond financing

Optimal Capital Structure is achieved where MBMC of bond financing Firm VL (MM '63) B+S (Leverage) if moderate level of bond financing Benefit > Cost if excessive level of bond financing Cost > Benefit

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