Chartered Financial Analyst Level 1

Ultimate access to all questions.

According to the static trade-off theory of capital structure, the value of a levered company is reduced by:

Exam-Like

Community

LLeetQuiz

Last updated: December 6, 2025 at 10:01

A

the present value of inherent tax shields only.

100.0%

Loading comments...

B

the present value of costs of financial distress only.

0.0%

C

both the present value of inherent tax shields and the present value of costs of financial distress.

Powered ByGPT-5.2