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- Question 2 (1 point) According to the static trade off theory the value of a levered firm is OVL=V VLE VU + PV (Tax

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- Question 2 (1 point) According to the static trade off theory the value of a levered firm is OVL=V VLE VU + PV (Tax Sheild) - PV (Financial Distress Costs) VL= VU + PV (Tax Sheild) - PV (Financial Distress Costs) - PV (Agency Costs) VL= VU + PV(Tax Sheild)

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