Question: 1. Explain why the following statement is true: All else the same, firms with relatively stable sales are able to carry relatively high debt/asset ratios.

1. Explain why the following statement is true: "All else the same, firms with relatively stable sales are able to carry relatively high debt/asset ratios."

and the explain how a firm might shift its capital structure so as to change its weighted average cost of capital (WACC). What would be the impact on the value of the firm?

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