Which of the following statements is correct?
A) Leverage reduces the risk of equity even when there is no risk that the firm will default.
B) Leverage increases the risk of debt even when there is no risk that the firm will default.
C) Leverage increases the risk of equity even when there is no risk that the firm will default.
D) Leverage reduces the risk of debt even when there is no risk that the firm will default.
Correct Answer:
Verified
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