If the cost of debt is less than the cost of equity, why doesn 't the firm 's cost of capital continue to decrease with the use of more and more debt ...

When taxes and bankruptcy costs are considered a firm ha ...

If the cost of debt is less than the cost of equity, why doesn't the firm's cost

Question:

If the is less than the cost of equity, why doesn't the firm's continue to decrease with the use of more and more debt?
Cost Of Capital
Cost of capital refers to the opportunity cost of making a specific investment . Cost of capital (COC) is the rate of return that a firm must earn on its project investments to maintain its market value and attract funds. COC is the required rate of... Cost Of Debt
The cost of debt is the effective interest rate a company pays on its debts. It’s the cost of debt, such as bonds and loans, among others. The cost of debt often refers to before-tax cost of debt, which is the company's cost of debt before taking...