If a firm increases its use of both operating and financial leverage, then you should expect...
If a firm increases its use of both operating and financial leverage, then you should expect the firm's:
a. asset beta to exceed its equity beta.
b. beta of debt to exceed 1.0.
c. beta to remain constant as the increased operating leverage will offset the increased financial leverage.
d. equity beta to increase.
e. debt beta to exceed its equity beta.
Homework Answers
One should expect the firm's: d. equity beta to increase when a firm increases its use of both operating and financial leverage
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If a firm increases its use of both operating and financial
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