stion 14 et ered The MM model with corporate taxes assumed that there are no costs of bankruptcy. If bankruptcy costs were included, the optimal amount of debt is reached when expected bankruptcy-related costs exceed the tax benefits of the additional debt. At this point, the WACC for the firm will be at its lowest rate. ed out of ng an Select one: O True O False 5 Under the MM model with corporate taxes but no personal taxes. and without bankruptcy costs, what happens? of Select one: a. Cost of debt will rise with the increase of additional debt. O b. Equity costs decrease with more debt financing. O c. The value of a firm is not affected by an increase in debt financing O d. The optimal amount of leverage for a firm is 100% debt. %