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Question 4 (2 points) What affect would an increase in the costs of bankruptcy have on the capital structure of a firm? Question 4 options:
Question 4 (2 points)
What affect would an increase in the costs of bankruptcy have on the capital structure of a firm?
Question 4 options:
| Higher bankruptcy costs make debt less expensive, so firms will use more debt and less equity. |
| Higher bankruptcy costs make debt more expensive, so firms will use less debt and more equity. |
| Bankruptcy costs have no impact on the capital structure decision. |
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