Compared with an All-Equity Financed Firm,one That Uses Debt Will

question 32

Multiple Choice

Compared with an all-equity financed firm,one that uses debt will have

• A) a lower degree of financial leverage.
• B) greater variation in EPS and ROE.
• C) lower risk.
• D) less risk of bankruptcy.
• E) lower profits per share during an economic expansion.

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Definitions:

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