Zero debt to successively higher levels of debt

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If a tax paying firm went from zero debt to successively higher levels of debt, why would you expect its stock price to rise? (Note: beyond a point, excessive use of debt would cause the stock price to then hit a peak, and then begin to decline.)
a. concentration of ownership (i.e., increased use of "other people's money" on operating the firm)
b. debt is a cheaper cost of capital, thus the use of debt decreases the financing expenses for the firm.
c. Debt payments, i.e., interest payments, are a tax-deductible expense, which creates a debt tax shield
d. All of the above
e. None of the above.

Reference no: EM1355059

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