Which of the following statements is NOT CORRECT? The trade-off theory states that the capital structure decision involves a tradeoff between the costs and benefits of debt financing. If Miller and Modigliani had incorporated the costs of bankruptcy into their model, it is unlikely that they would have concluded that 100% debt financing is optimal. O O O O O An increase in the corporate tax rate is likely to encourage a company to use more debt in its capital structure. If changes in the bankruptcy code make bankruptcy less costly to corporations, then this would likely reduce the debt ratio of the average corporation. Under MM with corporate taxes, the value of a levered firm exceeds the value of the unlevered firm by the product of the tax rate times the market value dollar amount of debt