If a firm's stock price increases and everything else remains constant,the proportion of debt in the firm's capital structure will fall.

Name: If a firm's stock price increases and everything else remains constant,the proportion of debt in the firm's capital structure will fall.
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Question

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When a firm's stock price increases, the equity value rises, increasing the total market value of the firm. If the amount of debt remains constant, the proportion of debt relative to the total capital decreases.

If a Firm's Stock Price Increases and Everything Else Remains