Volatility of earnings will affect the optimal level of debt for a firm.
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Q4: When a firm is operating at its
Q5: All else the same, taxes and bankruptcy
Q6: All else equal, higher financial leverage decreases
Q7: Tax rate will affect the optimal level
Q8: When a firm is operating at its
Q10: When EBIT is positive, increasing financial leverage
Q11: Assume there are no personal or corporate
Q12: When a firm is operating at its
Q13: Ignoring financial distress costs, borrowing money decreases
Q14: Nature of assets will affect the optimal
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