11. Which of the following are predictions of trade-off theory, all else equal? 12. a. 51.0 Firms with a larger proportion of intangible assets like Fl&D researchers should have higher leverage. Firms with a larger proportion of assets whose use is unique to the firm should have higher leverage. Firms with higher earnings volatility should have higher leverage. Firms with diversified lines of business should have higher leverage. An investor can create the effect of leverage on hisfher account by: i) Buying equity of an unlevered firm ll) investing in risk-free debt like T-bills Ill) Borrowing on hislher own account 51:3 579: lonly I! only Ill only land lll only