9. Are the following statements true or false (1 point for each sub question; blue box)? Briefly explain why (1 paragraph at most, 3 points for each sub question; green box) (total 8 points): 9.1 Companies can reduce the risk of financial distress by issuing debt and using the proceeds of the debt issuance to repurchase stock. (4 points) 9.2 Small research & development intensive startups with revenues in the distant future should have optimal leverage ratios that are below 30%. (4 points)

Answer rating: 100% (QA)

91 False 3 points Issuing debt and using it to repurchase stock can actually increase the risk of fi... View the full answer