As a firm increases its level of debt relative to its level of equity,the firm is:

Name: As a firm increases its level of debt relative to its level of equity,the firm is:
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Question

Quizplus · Accepted Answer

Increasing the level of debt relative to equity means that the firm is taking on more debt financing and less equity financing, which results in increased leverage. Leverage refers to the extent to which a firm relies on debt financing relative to equity financing. Therefore, the correct answer is (D) increasing its leverage.

As a Firm Increases Its Level of Debt Relative to Its