Solution-What is the name of the theory

What is the name of the theory

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Reference no: EM133121322

Firms have incentives to take on as much debt as possible give a tax rate greater than 0%.

a) Explain why firms won't do that in practice.

b) Include a brief example (hypothetical or real) that supports your explanation.

c) What is the name of the theory that argues that there is an optimal capital structure, likely between 0% and 100% debt to-value ratio?

d) Based on DeAngelo and Roll (2015), what can we say about the optimal capital structure?

Reference no: EM133121322

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What is the name of the theory

Reference no: EM133121322

Reference no: EM133121322

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