In which of the following circumstances should a company increase the proportion of debt in its capital

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In which of the following circumstances should a company increase the proportion of debt in its capital structure? (Assume that the only objective of the firm is to maximise value.)

1. When the tax rate increases

2. When the borrowing rate increases

3. When company's assets become obsolete

4. When it is in the start-up phase of life and getting a bank loan easily

Related Book For answer-question

Financial Reporting Financial Statement Analysis and Valuation a strategic perspective

ISBN: 978-1337614689

9th edition

Authors: James M. Wahlen, Stephen P. Baginski, Mark Bradshaw

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Posted Date: Dec 14, 2023 09:05 AM

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In which of the following circumstances should a company increase the proportion of debt in its capital

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Financial Reporting Financial Statement Analysis and Valuation a strategic perspective

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