The Textbook's Coverage of Leverage Explained Its Use Will

question 17

Multiple Choice

The textbook's coverage of leverage explained its use will:

• A)increase the expected return on equity but not the risk of these returns
• B)reduce the risk but not the expected return on equity
• C)increase the return on equity as long as the return on assets is less than the cost of debt
• D)reduce the risk of bankruptcy.
• E)None of these.

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