Explain how each of the following changes will affect Harbridge Electronix's range of earnings chart (Figure 6-2). Which changes would make debt financing more attractive? Which less attractive?

a. An increase in the interest rate on debt.

b. An increase in Harbridge's stock price.

c. Increased uncertainty about Harbridge's future earnings.

d. Increased common stock dividends.

e. An increase in the amount of debt Harbridge already has outstanding.AppendixLO1