If a firm uses an aggressive financing strategy, ________.
A) it increases return and increases risk
B) it increases return and decreases risk
C) it decreases return and increases risk
D) it decreases return and decreases risk

Question

Quizplus · Accepted Answer

An aggressive financing strategy involves borrowing a lot of money to finance operations, which can increase the return on investment. However, this also increases the risk involved in such investments. Therefore, an aggressive financing strategy increases both return and risk.

If a Firm Uses an Aggressive Financing Strategy, ________