Question: Check all that apply. An increase in debt financing decreases the risk of bankruptcy. An increase in the risk of bankruptcy is likely to reduce

Check all that apply.
An increase in debt financing decreases the risk of bankruptcy.
An increase in the risk of bankruptcy is likely to reduce a firms free cash flows in the future.
Risks of bankruptcy increase management spending on perquisites and increase agency costs.
An increase in debt financing beyond a certain point is likely to increase the firms cost of equity.
The pre-tax cost of debt increases as a firms risk of bankruptcy increases.

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