Which of the Following Statements Concerning a Firm's Degree of Financial

Multiple Choice

Which of the following statements concerning a firm's degree of financial leverage (DFL) is correct? Assume everything else is equal. 

A) If the firm issues additional common stock, its DFL should increase.
B) Compared to a lower DFL, a higher DFL implies a greater financial risk.
C) Compared to a higher DFL, a lower DFL implies a greater financial risk.
D) If the firm issues additional long-term debt, its DFL should decrease.
E) The firm's DFL cannot be negative.