A firm's debt to equity ratio varies at times because

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All of these statements are accurate reasons why a firm's debt to equity ratio may vary over time. A firm may want to sell common stock when prices are high and bonds when interest rates are low, in order to obtain the most favorable terms for its securities. Timing fundraising efforts is also important for minimizing costs and maximizing returns over the long run. Additionally, the market may allow some flexibility in the debt to equity ratio before penalizing the firm with a higher cost of capital.

A Firm's Debt to Equity Ratio Varies at Times Because