Generally speaking, the cost of debt is cheaper than the cost of equity. Does it imply that a firm should increase its debt-to-equity ratio to as high as possible such that its corporate cost of capital can be minimized

Capital Structure involves, among other things, the amount of debt and equity a company holds. Once again, given the current economic environment, what is an appropriate amount of debt (leverage) that some companies have or should have these days with all the uncertainty surrounding the markets and economy? what is an example of a company experiencing such leverage issues;

Under the trade-off theory, lowering the corporate tax rate will incentivize companies to increase the ratio of debt in their capital structure.   Question options:   a) True   b) False

Suppose a firm wants to maintain a specific TIE ratio. It knows the amount of its debt, the interest rate on that debt, the applicable tax rate, and its operating costs. With this information, the firm can calculate the amount of sales required to achieve its target TIE ratio. a. True b. False