“Which of the following is true?

“Which of the following is true?a. a firm with low anticipated profit will likely take on a high level of debt.b. a successful firm will probably take on zero debtc. rational firms raise debt levels when profits are expected to decline.d. rational investors are likely to infer a higher firm value from a zero debt leave.e. Investors will generally view an increase in debt as a positive sign for the firm’s value.”

CORRECT ANSWER IS INDICATED IN BLACKWhich of the following is true?a. a firm with low anticipated profit will likely take on a high level of debt.b. a successful firm will probably take on zero…