The weighted average cost of capital rises at higher levels of debt owing to Blank______.Multiple choice question.financial distress costshigher dividend costshigher working capitalexcess free cash flow

Firm value initially increases when the proportion of debt in the capital structure increases due to the Blank______.Multiple choice question.lower dividend paymentsdebt tax shieldhigher dividend paymentslower interest expenses

A stock price fall may come from Blank______.Multiple choice question.a decrease in debtan increase in debt

How does the level of debt affect the weighted average cost of capital (WACC)?Multiple choice question.The WACC initially rises and then falls as debt increases.The WACC initially falls and then rises as debt increases.The WACC always increases as debt increases.The WACC always falls as debt increases.

Whenever the cost of capital for an all-equity firm is greater than the cost of debt, the cost of equity Blank______.Multiple choice question.decreases with leverageincreases with leverageis unaffected by leverage

Based on the free cash flow hypothesis, firms should issue Blank______ debt.Multiple choice question.nolessmore