An increase in a firm's level of debt will:

Name: An increase in a firm's level of debt will:
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Increasing a firm's level of debt will increase the fixed interest and principal payments the firm must make. This will increase the financial risk and variability in earnings per share, as earnings must first cover these fixed payments before profits can be distributed to shareholders. This can lead to greater fluctuations in earnings and potentially lower returns to shareholders.

An Increase in a Firm's Level of Debt Will