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V = Vy+D Value of bank V=V, +tD.C Registry compliance costs fax deduction on doing Debt V Optimum A B C D Debt More debt

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V = Vy+D Value of bank V=V, +tD.C Registry compliance costs fax deduction on doing Debt V Optimum A B C D Debt More debt = less capital If the point in the X-axis above represents the optimal debt which is 89% Assuming this bank has $100 billion of assets, then the target capital of this bank should be $10.5 billion. Select one: O True False

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