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Up to now no body has been able to present an optimal capital
structure. The choice of capital structure should be based on tax saving, risk and cost of bankruptcy and asset type. For example, a
safe, consistently profitable firm, with few intangible assets or growth opportumties ought to find a relatinely high debt ratio attractive. A risky growth company ought to avoid debt financing,
especially if it faces other ways of shielding its income from taxes. Finaincing choices should also be based on issue costs,
opportunities for subsidized financing and etc.