Other things held constant, an increase in financial leverage will increase a firm's market (or systematic) risk as measured by its beta coefficient.

Name: Other things held constant, an increase in financial leverage will increase a firm's market (or systematic) risk as measured by its beta coefficient.
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Question

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An increase in financial leverage will increase a firm's financial risk, which in turn increases its market (or systematic) risk as measured by its beta coefficient.

Other Things Held Constant, an Increase in Financial Leverage Will