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salonijainnn salonijainnn
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2 months ago
What would happen to a firm that uses an excessive amount of debt in a world with no taxes?

▸ The value of the firm would increase because of the increase in the assets of the firm.

▸ The value of the firm would decrease because of the increase in the present value of distress costs.

▸ It is completely irrelevant to the size of the firm.

▸ The value of distress costs do not affect a firm in a tax-free world.
Textbook 
Corporate Finance

Corporate Finance


Edition: 5th
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pigglyoink14pigglyoink14
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2 months ago
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salonijainnn Author
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2 months ago
Thanks for your help!!
Marcie D
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Yesterday
Smart ... Thanks!
smdavis
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2 hours ago
This site is awesome
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