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a) The cost of debt is generally less than the cost of share capital and hence can lower the overall cost of capital for a firm.
b) Debt interest only gets paid when the company is making a profit.
c) It reduces the amount of corporate tax payable by firms by reducing the amount of taxable profit.
d) The required return on debt is lower because, from the lender's point of view, debt is less risky than equity.
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