Other Things Held Constant,which Event Is Most Likely to Encourage

question 39

Multiple Choice

Other things held constant,which event is most likely to encourage a firm to increase the amount of debt in its capital structure?

• A)Its sales become less stable over time.
• B)The costs that would be incurred in the event of bankruptcy increase.
• C)Management believes that the firm's stock has become overvalued.
• D)The corporate tax rate increases.

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