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Which of the following would likely encourage a firm to increase the debt in its capital...

Which of the following would likely encourage a firm to increase the debt in its capital structure?

a. the corporate tax rate increases

b. the personal tax rate increases

c. due to market changes, the firm's assets become less liquid

d. changes in bankruptcy code make bankruptcy less costly to the firm

e. the firms sales and earnings become more volatile

provide rational for each letter in order to support your decision.

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Expert Solution

jeff jeffy answered 4 months ago
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