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If investors' aversion to risk rose, causing the slope of the SML to increase, this would have a greater impact on the required rate of return on equity, rs, than on the interest rate on long-term debt, rd, for most firms.Other things held constant, this would lead to an increase in the use of debt and a decrease in the use of equity.However, other things would not stay constant if firms used a lot more debt, as that would increase the riskiness of both debt and equity and thus limit the shift toward debt.
Enforce Decisions
The act of implementing or ensuring compliance with decisions made by a person or body with authority.
Globalization
The process of interaction and integration among people, companies, and governments worldwide, leading to increased interconnectedness and exchange of goods, services, ideas, and culture.
Immigrant Workers
Individuals who have migrated from one country to another for the purpose of seeking employment.
Professional Specialty
A focused area within a profession that an individual has developed expert knowledge and skills in, often requiring specific education and training.
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