Question
under what circumstances, the optimal Debt/Equity ratio will be the highest? (Assume that the government allows interest cost deduction before corporate tax is calculated). a.
under what circumstances, the optimal Debt/Equity ratio will be the highest? (Assume that the government allows interest cost deduction before corporate tax is calculated).
a. Corporate taxes are 10% and there is no possibility of bankruptcy
b. Corporate taxes are 0% and there is a possibility of bankruptcy
c. Corporate taxes are 10% and there is a possibility of bankruptcy
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Basic Finance An Introduction to Financial Institutions, Investments and Management
Authors: Herbert B. Mayo
11th Edition
1285425790, 1285425795, 9781305464988 , 978-1285425795
