Solution-Interest rates may change or underwriting costs

Interest rates may change or underwriting costs may change

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Reference no: EM131140390

Although debt financing is usually the cheapest component of capital, it cannot be used to excess because

A) Interest rates may change.

B) The firm's stock price will increase and raise the cost of equity financing.

C) The financial risk of the firm may increase and thus drive up the cost of all sources of financing.

D) Underwriting costs may change.

Reference no: EM131140390

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Interest rates may change or underwriting costs may change

Reference no: EM131140390

Reference no: EM131140390

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