Question: When graphing firm value against debt levels, the debt level that maximizes the value of the firm is the level where Group of answer choices

When graphing firm value against debt levels, the debt level that maximizes the value of the firm is the level where

Group of answer choices

the increase in the present value of distress costs from an additional dollar of debt is greater than the increase in the present value of the interest tax shield

the increase in the present value of distress costs from an additional dollar of debt is equal to the increase in the present value of the interest tax shield

the increase in the present value of distress costs from an additional dollar of debt is less than the increase in the present value of the interest tax shield

the distress costs as well as the interest tax shields are maximized

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