Which of the following statements is incorrect?
A) Debt is almost always the most expensive form of capital.
B) The amount of debt a company can carry depends on the underlying business risk of the asset being financed.
C) The more a company relies on debt financing, relative to equity financing, the greater the variation of returns to equity.
D) Financial leverage tends to increase returns at the expense of increased variability and increased risk of financial distress.
Correct Answer:
Verified
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