Other things held constant,the more debt a firm uses,the lower the firm's profit margin will be.

Name: Other things held constant,the more debt a firm uses,the lower the firm's profit margin will be.
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Question

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When a company uses too much debt, it has to pay interest on the debt, which can significantly reduce profit margins. Therefore, the more debt a firm uses, the lower its profit margin will be, all other things remaining constant.

Other Things Held Constant,the More Debt a Firm Uses,the Lower