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Other things held constant, which of the following events is most likely to encourage a firm to increase the amount of debt in its capital
Other things held constant, which of the following events is most likely to encourage a firm to increase the amount of debt in its capital structure?
- Its sales become less stable over time.
- The costs that would be incurred in the event of bankruptcy increase
- Management believes that the firms stock has become overvalued
- Its degree of operating leverage increases
- The corporate tax rate increases
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