Explain what will happen to the firm's optimal capital structure as a result of the following changes;
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Question:
Explain what will happen to the firm's optimal capital structure as a result of the following changes;
a) An increase in the firm's marginal tax rate
b) an increase in the firm's investment opportunities
c) The founding owner retires from day-to-day management of the firm and hires a professional manager as his replacement
d) a decline in business risk as the industry matures
e) an increase in R&D intensity and marketing expenditures
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