Which one of the following statements is correct?
A) The lower the level of a firm's debt, the higher the firm's leverage.
B) The lower the level of a firm's debt, the lower the firm's equity multiplier.
C) The lower the level of a firm's debt, the higher the firm's equity multiplier.
D) The tax benefit from using debt financing reduces a firm's risk.
Answer: B) The lower the level of a firm's debt, the lower the firm's equity multiplier.
Business
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