According to the static theory of capital structure, ____________________.
A) A ﬁrm's choice of assets and operations is ﬁxed for all time.
B) A ﬁrm will borrow up to the point where the beneﬁt from an extra dollar of debt is just equal to the tax beneﬁt associated with that debt.
C) The value of the ﬁrm will differ from the M&M value without taxes by the gain from leverage.
D) The optimal WACC is the same as it is in M&M with taxes.
E) The value of the ﬁrm in M&M with taxes is overstated by the amount of ﬁnancial distress costs.

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The Answer of According to the static theory of capital structure, ____________________.
A) A ﬁrm's choice of assets and operations is ﬁxed for all time.
B) A ﬁrm will borrow up to the point where the beneﬁt from an extra dollar of debt is just equal to the tax beneﬁt associated with that debt.
C) The value of the ﬁrm will differ from the M&M value without taxes by the gain from leverage.
D) The optimal WACC is the same as it is in M&M with taxes.
E) The value of the ﬁrm in M&M with taxes is overstated by the amount of ﬁnancial distress costs.

According to the Static Theory of Capital Structure, ____________________