Minden Co. has unsecured debt of $1,500,000 that carries interest at 10%. If Minden Co. was able to offer land and buildings with an appraised value of $2 million as security for the debt, the interest rate should *

a) decrease because of reduced risk

b) decrease because of higher profits

c) decrease because of a higher interest cover ratio

d) increase because of risk

e) none of the above

Capacity :

a) cannot be changed in the short run

b) can be changed in the long run

c) is completely under the control of management

d) (a) & (b), but not (c)

e) (a), (b) & (c)