You conducted a research study and found that corporations that finance their investments with a larger ratio

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You conducted a research study and found that corporations that finance their investments with a larger ratio of debt to equity tend to pay higher rates of interest to lenders. Why do you think this practice occurs?

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Public Finance and Public Policy

ISBN: 978-1429278454

4th edition

Authors: Jonathan Gruber

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Question Posted: Apr 25, 2015 07:46 AM

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You conducted a research study and found that corporations that finance their investments with a larger ratio

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One component of the interest rates charged by lenders is a risk premium the higher the risk of de...View the full answer

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