When a firm is operating at its target capital structure point, shareholder value is maximized.
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Q11: When a firm is operating at its
Q12: All else the same, taxes and bankruptcy
Q13: Suppose we wish to draw a graph
Q14: Tax rate will affect the optimal level
Q15: Ignoring financial distress costs, borrowing money decreases
Q17: Volatility of earnings will affect the optimal
Q18: When EBIT is positive, the effect of
Q19: It appears that, capital structures vary quite
Q20: The optimal capital structure is the mixture
Q21: The actual value of a firm is
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