When Only Equity Counts as Capital, the Higher the Capital

question 1

Multiple Choice

When only equity counts as capital, the higher the capital ratio, the

• A)lower the leverage measure.
• B)lower the degree of financial leverage.
• C)higher the leverage measure.
• D)lower the leverage measure AND lower the degree of financial leverage.
• E)lower the degree of financial leverage AND higher the leverage measure.

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Definitions:

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