Question
Think about homemade leverage. Assuming no taxes, if a firm increases its debt ratio from 40% to 50%, an investor can offset the firm's change
Think about "homemade leverage." Assuming no taxes, if a firm increases its debt ratio from 40% to 50%, an investor can offset the firm's change in capital structure by:
a. borrowing money and investing it in the firm's equity.
b. selling part of her holding and buying debt.
c. holding a diversified portfolio.
d. switching her investment to convertible bonds.
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Dynamics Of International Finance
Authors: Ruchi Mehrotra Joshi
1st Edition
1685078389, 978-1685078386
