Which of the following statements is true?
A) Lenders will charge a higher interest rate if the company has a high proportion of company-specific assets.
B) The variability of the net cash flows from a company's assets is taken as a measure of its financial risk.
C) The optimal capital structure will not be affected by its business risk.
D) Lenders will charge a higher interest rate if the company has a high proportion of company-specific assets and the optimal capital structure will be affected by its business risk.
Correct Answer:
Verified
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