Changing the capital structure by adding debt will not:

Question

Quizplus · Accepted Answer

Adding debt to a company's capital structure increases the risk to both equity and debt holders. For equity holders, the risk increases because debt payments have priority over equity dividends, and for debt holders, the risk increases because the company is taking on more debt, potentially affecting its ability to repay. Therefore, adding debt does not decrease debt holder risk; it increases it.

Changing the Capital Structure by Adding Debt Will Not