Multiple Choice
All else the same, the financial leverage of a firm will _________________.
A) Decrease as the debt/equity ratio increases.
B) Decrease as the firm's retained earnings account grows.
C) Increase by the amount of equity it issues in a given year.
D) Decrease if the firm has negative net income.
E) Decrease as the firm uses debt to fund expansion projects.
Correct Answer:
Verified
Correct Answer:
Verified
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