Financial risk is the risk to shareholders that results from debt financing.
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Q12: At moderate debt levels the probability of
Q13: MM's proposition II states that the required
Q14: Debt financing affects neither the business risk
Q15: The benefit of an interest tax shield
Q16: As long as investors can borrow or
Q18: MM's proposition I,or the debt-irrelevance proposition,states that
Q19: According to MM's proposition II the expected
Q20: Loan covenants can ensure that companies will
Q21: A firm issues 100,000 shares of common
Q22: An implicit cost of adding debt to
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