A Firm's Use of More Debt Financing Creates More Risk

question 1

True/False

A firm's use of more debt financing creates more risk to owners and thus increases the cost of equity.

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Definitions:

Cumulative Frequency

The sum of a class and all classes below it in a frequency distribution.

Frequency Polygon

A graphical representation of the distribution of a dataset that shows the frequency of data points within certain intervals.

Variation

A term describing the extent to which data points in a dataset differ from each other and from the mean.

Class Interval

A fixed range of values, used in the creation of a frequency distribution.