hard · Principles of Finance cost-of-capital-structure
Which of the following would likely lead a firm to choose a lower Debt-to-Equity ratio in its target capital structure?
- A high proportion of tangible assets like land and machinery.
- Stable, predictable revenues from long-term government contracts.
- An increase in the corporate marginal tax rate.
- High volatility of operating cash flows and high research and development (R&D) intensity.
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