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The marginal tax benefit of debt falls as leverage increases because ________. Select one: a. the risk of bankruptcy increases the more a firm borrows
The marginal tax benefit of debt falls as leverage increases because ________.
Select one:
a. the risk of bankruptcy increases the more a firm borrows
b.more leverage means the probability of bankruptcy goes up
c. as a firm borrows more, the interest rate on its debt will go up
d. more leverage means a higher chance that the firm will be unprofitable and will not enjoy a tax deduction from interest expense in the current year
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