the market value of a leveraged firm is equal to the market value of an unlevera

Question

the market value of a leveraged firm is equal to the market value of an unleveraged firm

a- minus the present value of tax shields minus the present value of financial distress costs minus the present value of agency costs

b- plus the present value of tax shields minus the present value of financial distress costs minus the present value of agency costs

c- plus the present value of tax shields plus the present value of financial distress costs plus the present value of agency costs

d- plus the present value of tax shields minus the present value of financial distress costs plus the present value of agency costs

Explanation / Answer

Answer:b- plus the present value of tax shields minus the present value of financial distress costs minus the present value of agency costs

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