When Corporate Taxes and the Cost of Financial Distress Are

question 68

Multiple Choice

When corporate taxes and the cost of financial distress are taken into consideration,the market value of a firm is equal to the value of the all-equity firm _____ the PV of the tax shield _____ the costs of financial distress.

• A) plus; plus
• B) minus; plus
• C) plus; minus
• D) minus; minus

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