What are the empirical problems involved in testing for the


What are the empirical problems involved in testing for the effect of capital structure on the value of the firm?

Assume a world without taxes. How would the weighted average cost of capital vary with the ratio of debt to total assets, B/(B + S), if the cost of equity remained constant, i.e., ks =p>kb ?

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Financial Management: What are the empirical problems involved in testing for the
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