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2 years ago
Which of the following is consistent with the Tradeoff theory of capital structure?
A) The cost of capital continuously decreases as the firm's debt ratio increases.
B) The cost of capital remains constant as the firm's debt ratio increases.
C) There are no costs associated with bankruptcy.
D) There is an optimal level of debt financing.
Textbook 

Financial Management: Principles and Applications


Edition: 13th
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