Examlex
Match each definition with the appropriate term.
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Static Theory of Capital Structure
A theory proposing that there is an optimal capital structure for a company, balancing the benefits and costs of debt versus equity financing to maximize value.
Financial Distress Costs
Expenses and losses incurred by a firm due to financial distress, including bankruptcy costs, agency costs, and the cost of lost opportunities.
Tax Benefit
A reduction in tax liability offered by the government for specific expenses, investments, or other financial decisions, leading to a decrease in the total taxes paid.
Debt-Equity Ratio
A metric for evaluating a firm's financial leverage, determined by dividing its total debts by the equity held by shareholders.
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