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firm increases its debt ratio from 50% to 60%. In the absence of taxes, an investor can offset the change in capital structure by selling
firm increases its debt ratio from 50% to 60%. In the absence of taxes, an investor can offset the change in capital structure by
selling part of her holding and buying debt.
borrowing money and investing it in the firms equity.
holding a diversified portfolio.
switching her investment to convertible bonds.
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