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Explain how you reached the answer or show your work if a mathematical calculation is needed, or both. 4. Suppose a new company decides to
Explain how you reached the answer or show your work if a mathematical calculation is needed, or both. 4. Suppose a new company decides to raise a total of $200 million, with $100 million as common equity and $100 million as long-term debt. The debt can be mortgage bonds or debentures, but by an iron-clad provision in its charter, the company can never raise any additional debt beyond the original $100 million. Given these conditions, which of the following statements is CORRECT? a. The higher the percentage of debt represented by mortgage bonds, the riskier both types of bonds will be and, consequently, the higher the firm
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