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Why might a firm deliberately use less debt than they think is optimal? Why might a firm deliberately use less debt than they think is
Why might a firm deliberately use less debt than they think is optimal? Why might a firm deliberately use less debt than they think is optimal? Use of additional debt can raise the profitability of a firm, but more debt less than equity due to tax advantages, especially when rates are low. Ho company to pay out a portion of future earnings, even when earnings are the risks which are inevitably associated with long-term debt servicing. W oversimplification to say that the debt decision is a balancing of higher pr shareholders against greater chance of loss, it is certainly true that this is Comment: term: Debt tax shield, dividend reinvestment plan, stock split. that r s a tax shield because Define e ach normal tax shield is the reduction in income taxes Debt tax shield - a deduction from taxable income. Taking on debt create irally reinve
Why might a firm deliberately use less debt than they think is optimal?
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