Consider the pie models of corporate structure.What is the difference between the all-equity pie and the levered pie for a firm in the presence of taxes?
A)The size of the levered pie is smaller than the all-equity pie.
B)Taxes eat a slice of the levered pie but pass by the all-equity pie.
C)Both pies are the same size and are sliced identically.
D)Taxes eat a slice of both pies but take a larger slice of the all-equity pie.
E)The all-equity pie is smaller in size than the levered pie.

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The Answer of Consider the pie models of corporate structure.What is the difference between the all-equity pie and the levered pie for a firm in the presence of taxes?
A)The size of the levered pie is smaller than the all-equity pie.
B)Taxes eat a slice of the levered pie but pass by the all-equity pie.
C)Both pies are the same size and are sliced identically.
D)Taxes eat a slice of both pies but take a larger slice of the all-equity pie.
E)The all-equity pie is smaller in size than the levered pie.

Consider the Pie Models of Corporate Structure