Assess graduate students' understanding of the trade-offs that determine corporate capital structure: how corporate and personal taxes (tax shields), bankruptcy and financial distress costs, and agency problems (debt–equity conflicts, debt overhang, asset substitution, and agency costs of free cash flow) interact to influence leverage choices; include relevant theoretical frameworks (Modigliani–Miller with taxes, trade-off theory, pecking order) and implications for optimal leverage and empirical analysis.