Let's assume that there are taxes and financial distress costs in the economy. All else the...

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Let's assume that there are taxes and financial distress costs in the economy. All else the same, if the Biden's government increases the corporate tax rate, then it will likely decrease the optimal debt ratio for most of the companies O will change the optimal debt ratio, but the direction is unknown. will likely increase the optimal debt ratio I will likely not change the optimal debt ratio Let's assume that there are taxes and financial distress costs in the economy. All else the same, if the Biden's government increases the corporate tax rate, then it will likely decrease the optimal debt ratio for most of the companies O will change the optimal debt ratio, but the direction is unknown. will likely increase the optimal debt ratio I will likely not change the optimal debt ratio