Practicing Success
A firm's ability to borrow at a lower rate |
Decreases its capacity to employ higher debt Increases its capacity to employ higher debt Can or employ any amount of debt available from market Unable to raise any amount of debt |
Increases its capacity to employ higher debt |
A firm’s ability to borrow at a lower rate increases its capacity to employ higher debt. Thus, more debt can be used if debt can be raised at a lower rate, |