5. 6.

Suppose PPP firm is planning to decrease its debt-equity ratio, which of the following firm's variables can change? ho Select one: a. cost of equity O bcost of debt. Oc financial leverage. Od Financial leverage cost of equity, and cost of debt. In general, financial managers prefer to exploit retained earnings rather than issuing new debt or new equity to finance the capital expenditures because: D they can avoid the discipline of the financial markets; II) the costs of issuing new securities are high; TID) the announcement of new equity issue is usually bad news for investors. Select one O a. ll only ob I, II and III. Ocl only od lland III only