Multiple Choice
An increase in the financial leverage of a firm as a result of an increase in outstanding debt __________ the potential reward to stockholders while ___________ the risk of financial distress or bankruptcy.
A) Decreases; decreasing
B) Increases; decreasing
C) Increases; increasing
D) Decreases; increasing
E) Does not affect; increasing
Correct Answer:
Verified
Correct Answer:
Verified
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