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What happens to a firm value as its leverage increases

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Reference no: EM133575262

Question: What happens to a firm's value as its leverage increases? (Hint: Think about this in three stages. First, try to think about if the operational profits of a business are impacted by the amount of debt a business takes on; second, think back to the tax benefits we've talked about; and third, think about how leverage might actually make operations more complicated). This is a really hard question - you might not get it - but go ahead and try anyway.

Reference no: EM133575262

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