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B. Define a new series starting with the next legacy number
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D. Use the primary series and change the starting number
Answer: B,C
NEW QUESTION: 2
In the absence of bankruptcy and agency costs and signaling actions, tax deductibility of interest payments implies that the optimal debt ratio should be:
A. 50%
B. zero
C. none of these answers
D. 100%
Answer: D
Explanation:
Explanation/Reference:
Explanation:
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: 3
A. Option B
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C. Option C
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