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A firm issues a $10 million bond with a 7% coupon rate, 4 year maturity, and annual interest payments when market interest rates are 6%.

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A firm issues a $10 million bond with a 7% coupon rate, 4 year maturity, and annual interest payments when market interest rates are 6%. For an analyst covering the firm, what is the impact on the debt to equity ratio if the market rate of interest decreases after the bond is issued? A decrease No change An increase

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