total revenues of the new project D. None of the above (11) Utility firms tend to have high debt ratios because they are regulated, and their earnings are stable. If the utility market is opened up to free competition, utility firms will have volatile earnings. What change would you expect to see in the debt ratios? A. No change. B. Debt/capital ratios will be 100%. C. Debt ratios will go up. D. Debt ratios will go down. . 12) firm has no debt right now and tries to find its optimal debt ratio. It has a tax rate of 30%. nsider holdings are 50% of outstanding shares. Its standard deviation of operating earnings 0%. Based on the following regression, what is the predicted debt ratio for the firm? 16 (inoider holdings) - 0.20(s.d.)