Which one of the following is correct based on the static theory of capital structure?
A)A debt-equity ratio of 1 is considered to be the optimal capital structure.
B)The more debt a firm assumes,the greater the incentive to acquire even more debt until such time as the firm is financed with 100 per cent debt.
C)At the optimal level of debt a firm also optimises its tax shield on debt.
D)A firm receives the greatest benefit from debt financing when its tax rate is relatively low.
E)The costs of financial distress decrease the value of a firm.

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The Answer of Which one of the following is correct based on the static theory of capital structure?
A)A debt-equity ratio of 1 is considered to be the optimal capital structure.
B)The more debt a firm assumes,the greater the incentive to acquire even more debt until such time as the firm is financed with 100 per cent debt.
C)At the optimal level of debt a firm also optimises its tax shield on debt.
D)A firm receives the greatest benefit from debt financing when its tax rate is relatively low.
E)The costs of financial distress decrease the value of a firm.

Which One of the Following Is Correct Based on the Static