Other things held constant, which of the following events is most likely to encourage a firm to increase the amount of debt in its capital structure? a. The corporate tax rate increases. b. Management believes that the firm's stock has become overvalued. c. The costs that would be incurred in the event of bankruptcy increase. d. Its sales become less stable over time. e. Its degree of operating leverage increases.

Secured loans are protected by collateral security. examples: title loans where the borrower uses the car title as collateral security interest rates are lower and repayments are longer therefore risk is low as a collateral security is given as guarantee to the bank in case of failure to pay the loanunsecured loans are not protected by collateral security but it is given on the creditworthiness of the borrower, trusting that she/he will pay on time. examples; payday loans is a short term loan where the borrower lends money from the bank and pays is back when the borrower receives his/her wages.interest rates are high and repayments are shorter. but the risk is high as no collateral security is given as a guarantee to the bank for payment of the loan

B. false hope it ! : )