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Which one of the following statements is true? Investors will generally view an increase in debt as a positive sign for the firm's future value.

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Which one of the following statements is true? Investors will generally view an increase in debt as a positive sign for the firm's future value. A firm with low anticipated profits will likely take on a high level of debt. A successful firm will probably be all-equity financed. Rational firms raise debt levels when profits are expected to decline. Rational investors are likely to infer a firm is more valuable when its debt level declines

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