As the firm increases its use of equity instead of debt financing, the cost of equity rises.
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Q2: An increase in the debt ratio may
Q3: The weighted cost of capital includes the
Q4: The lower the firm's tax rate, the
Q5: The weighted cost of capital includes the
Q6: If the firm issues debentures instead of
Q7: The optimal capital structure does not necessarily
Q8: The cost of debt is less than
Q9: Because interest is a tax-deductible expense, the
Q10: The cost of debt exceeds the cost
Q11: Retained earnings are more expensive than issuing
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