Question: Firms that prefer to use floating rather than fixed rate debt are likely to have cash flows that are positively correlated with the interest rates

Firms that prefer to use floating rather than fixed rate debt are likely to have cash flows that are positively correlated with the interest rates to decrease their debt-to-assets ratio when the interest rates rdecline to have cash flows that are negatively correlated with the interest rates to increase their debt-to-assets ratio when the interest rates rise to be in an industry with lower business risk

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