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Question 2 Which of the following is true? O A firm should use more debts since cost of debt is lower than cost of equity.

Question 2

Which of the following is true?

O A firm should use more debts since cost of debt is lower than cost of equity.

O The optimal capital structure of a firm will vary over time as taxes and market conditions change.

O The optimal capital structure of a firm will vary over time as management team changes.

O A firm should only use equity because of bankruptcy costs.

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