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What must a firm do to lower the weighted average of cost of capital? Trade off the value of the interest tax shield on debt
What must a firm do to lower the weighted average of cost of capital?
Trade off the value of the interest tax shield on debt and the risk of financial distress
Take on as much debt as possible because it is cheaper than equity and will lower the WACC automatically
Take on as little debt as possible, as it is easier to fund a company with equity
Optimize its investment decisionmaking
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