A decision maker running a firm evaluates the various
costs and benefits of alternative leverage plans. Kraus and Litzenberger (1973)
provide a classic statement of the theory that optimal leverage reflects a tradeoff
between the tax benefits of debt and the deadweight costs of bankruptcy.
Showing posts with label Trade-off theory. Show all posts
Showing posts with label Trade-off theory. Show all posts
Saturday, 5 May 2012
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