QUESTION 3 The trade-off theory implies that all-else equal: Firm value does not depend on the level of corporate tax rates Firm value is lower for firms located in countries with higher corporate tax rates The tax shield of debt is higher for firms located in countries with higher corporate tax rates The tax shield of debt is lower for firms located in countries with higher corporate tax rates QUESTION 4 The ABC company is in financial distress, has USD10,000 in caha, and debt with face value USD50,000 due next year. The ABC company has the possibility to invest in a project which requires an investment of all of its USD 10,000 cash and is expected to produce a cash flow next year of USD 100,000 with probability 5 percent, and USD 10,000 otherwise. Assume a discount rate of 20 percent throughout. By implementing the proje versus doing nothing, by how much does shareholder value increase? Roughly 2083 Roughly 12083 Roughly 4167 Roughly 8333 Roughly 1000 Click Save and submit to save and suhmit Click Saue All