Question
The present value of the costs of financial distress increases as the debt ratio increases because the: A. expected return on assets increases. B. equity
The present value of the costs of financial distress increases as the debt ratio increases because the:
A. expected return on assets increases.
B. equity tax shield is depleted.
C. present value of the interest tax shield is greater.
D. probability of default is greater.
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Options Futures And Other Derivatives
Authors: John Hull
11th Global Edition
1292410655, 9781292410654
