Which of the following statements is TRUE?
◦ Financial theorists have resolved the issue of how to maximize firm value by altering capital structure.
◦ Firms increase their debt usage when markets overvalue the firm.
◦ Firms with a high degree of operating leverage usually maintain high debt ratios.
◦ A firm's long-term earnings are more important than its near-term cash flows in determining the amount of debt to issue.
◦ A highly leveraged firm has less flexibility to take advantage of investment opportunities than companies with low debt ratios.