Without the stockholders' limited liability, the risk from the use of leverage:

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Without the stockholders' limited liability, the risk from the use of leverage would be significantly greater. Limited liability means that shareholders can only lose the amount of their investment in the company, even if the company incurs debts or liabilities beyond that amount. Without limited liability, shareholders would be fully responsible for the company's debts and liabilities, including those incurred through the use of leverage. This would make the risk from the use of leverage much greater.

Without the Stockholders' Limited Liability, the Risk from the Use