If a Firm Increases the Proportions of Debt and Preferred

question 55

Multiple Choice

If a firm increases the proportions of debt and preferred stock that are contained in its capital structure, its _____. 

• A)financial risk will increase
• B)business risk will decrease
• C)tax liability will increase
• D)operating leverage will decrease
• E)financial leverage will decrease

---

Definitions:

Biological Changes

Transformations or alterations occurring in living organisms as a result of growth, aging, or responses to environmental influences.

Social Changes

Shifts in the structure or culture of a society over time that influence the way individuals or communities interact and function.

Behavioral Changes

Alterations in an individual's actions or reactions, often as a result of learning, experience, or environmental influences.

Childbirth Customs

The practices, rituals, and beliefs associated with the process of giving birth, which vary widely across different cultures and societies.