Which of the Following Statements Is Correct

question 57

Multiple Choice

Which of the following statements is correct?

• A) The lower the level of a firm's debt, the higher the firm's leverage.
• B) The lower the level of a firm's debt, the lower the firm's equity multiplier.
• C) The lower the level of a firm's debt, the higher the firm's equity multiplier.
• D) The tax benefit from using debt financing reduces a firm's risk.

---

Definitions:

Discomfort

A mild feeling of physical or mental unease, often temporary and not related to a specific illness.

Impaired Gas Exchange

A condition where there is a problem with the transfer of oxygen and carbon dioxide between the lungs and the bloodstream.

Diagnostic Label

A classification or name given to a specific set of symptoms or patterns that are used to identify a medical condition or disease.

Dyspnea

Sensation of shortness of breath.