Question: Firms HD and LD are identical except for their use of debt and the interest rates they pay--HD has more debt and thus nust pay

 Firms HD and LD are identical except for their use of

Firms HD and LD are identical except for their use of debt and the interest rates they pay--HD has more debt and thus nust pay a higher interest rate. Both companies are small, so they are not subject to the interest deduction S

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