If the Firm Decreases Its Debt Ratio,both the Debt and the Equity

question 7

True/False

If the firm decreases its debt ratio,both the debt and the equity will become riskier.The debtholders and equityholders will require a higher return to compensate for the increased risk.

---

Definitions:

Viscosity

A measure of a fluid's resistance to flow, indicating its thickness or thinness.

Temperature

A physical quantity expressing the subjective perceptions of hot and cold, measured in degrees according to various scales (e.g., Celsius, Fahrenheit).

Hypotonic Sweat

Sweat that contains a lower concentration of solutes (mainly salt) than the surrounding tissues, often resulting from acclimatization to hot conditions.

Water Intake

The process of consuming water or fluids to maintain hydration and support bodily functions.