As a Firm Increases Its Level of Debt Relative to Its

question 28

Multiple Choice

As a firm increases its level of debt relative to its level of equity, the firm is ________.

• A) increasing the fraction of its equity
• B) decreasing the fraction of its debt
• C) decreasing its leverage
• D) increasing its leverage

---

Definitions:

Magnetic Field

A vector field that describes the magnetic influence on moving electric charges, electric currents, and magnetic materials.

Gyromagnetic Ratio

A constant for a given nucleus that relates its magnetic moment and angular momentum, important in NMR and MRI.

Proton Resonance

A nuclear magnetic resonance (NMR) technique used to determine the structure of organic compounds by observing the behavior of hydrogen nuclei in a magnetic field.

O-Chlorophenol

A type of chlorophenol with the chlorine atom bonded to the ortho position (adjacent to) of the hydroxyl group on the benzene ring.