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Alpha Beta Corporation maintains a constant debt-equity ratio of 0.5. The total value of the firm is $30 million, and existing debt is riskless. Over
Alpha Beta Corporation maintains a constant debt-equity ratio of 0.5. The total value of the firm is $30 million, and existing debt is riskless. Over the next three months, news will come out that will either raise or lower Alpha Beta's value by 18%. How will Alpha Beta adjust its debt level in response to keep its debt-equity ratio constant? Select one: O a. Either increase by $1.8 million or decrease by $1.8 million. ob. There will be no change as the debt-equity ratio will remain constant. oc. Either increase by $3.6 million or decrease by $3.6 million. od. Either increase by $2.7 million or decrease by $2.7 million
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