Which of these items will not generally be affected by an increase in the debt ratio?
A) Total risk.
B) Financial risk.
C) Market risk.
D) The firm's beta.
E) Business risk.

Question

Quizplus · Accepted Answer

The debt ratio does not affect the firm's business risk, which is related to the company's operations and industry-specific factors. The other options - total risk, financial risk, market risk, and the firm's beta - are all affected by changes in the debt ratio.

Which of These Items Will Not Generally Be Affected by an Increase