A decrease in the debt-to-assets ratio will generally have no effect on ____ risk.
A) Financial
B) Total
C) Business
D) Systematic,or market
E) None of the above (it will affect each type of risk above).

Question

Quizplus · Accepted Answer

A decrease in the debt-to-assets ratio primarily affects the financial structure of a company, reducing its financial risk by lowering the leverage. However, it does not directly impact the company's operational or business risk, which is more influenced by factors such as market demand, competition, and operational efficiency. Systematic or market risk is influenced by broader market or economic changes and is also not directly affected by a company's debt-to-assets ratio.

A Decrease in the Debt-To-Assets Ratio Will Generally Have No