The trade-off theory of capital structure predicts that a firm has an optimal capital structure. Below is an illustration of the relationships among the value of unlevered firm (VU), the value of debt tax-shields (7*D), value of debts, and the value of levered firm (VL). Value of Levered Firm, V W 0 Loss of Tax Shield Due to Excess Interest Loss of PV (Financial Distress Costs)- T"D VL with High Distress Costs Dhigh Value of Debt, D VL with No Distress Costs VL with Low Distress Costs Diow Which of the following statements is (are) FALSE? Select one or more alternatives: A curved line depicting an airline is likely to be on the left-hand side of that depicting a biotechnology company (assuming that their unlevered firm value is identical). Assume that this graph represents firms in the United States (where dividends are taxed twice). Adoption of the dividend imputation tax system (while keeping everything else equal) will reduce the slope of the straight line illustrating the value of debt tax-shields. Assume that this graph represents firms in the United States (where dividends are taxed twice). Adoption of the dividend imputation tax system (while keeping everything else equal) will increase the slope of the straight line illustrating the value of debt tax-shields. A curved line depicting an airline is likely to be on the right-hand side of that depicting a biotechnology company (assuming that their unlevered firm value is identical)