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NEW QUESTION: 1
In the absence of bankruptcy and agency costs and signaling actions, tax deductibility of interest payments implies that the optimal debt ratio should be:
C. none of these answers
If there are no costs to increased debt, such as bankruptcy costs, and no signaling effects in a firm's decisions about the capital structure, then a firm would try to maximize the benefits of the debt shield i.e.
the deductibility of interest payments. This implies a debt ratio of 100%.
NEW QUESTION: 2
Match the slot to the type of add in card that is appropriate for each slot: