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What is the optimal capital structure in the three cases that were discussed in this chapter? 1. Case I no taxes or bankruptcy costs 2.

What is the optimal capital structure in the three cases that were discussed in this chapter?

1. Case I no taxes or bankruptcy costs

2. Case II corporate taxes but no bankruptcy costs

3. Case III corporate taxes and bankruptcy costs

Does homemade leverage and homemade dividend work? Why or why not?

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