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ABC Company is contemplating on moving from an all-equity firm to adding 50% debt in the capital structure. If the company does not move to

ABC Company is contemplating on moving from an all-equity firm to adding 50% debt in the capital structure. If the company does not move to the proposed capital structure but the investor prefers the proposed capital structure, then the investor should:

(choose only one alternative)

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borrow enough debt to create the same debt-equity ratio.

do nothing.

invest money obtained from selling all of the shares in the company.

lend money in the same proportion.

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