Which one of the following statements is NOT correct?
A) A leveraged company is more sensitive to changes in its revenue income than a company that is not leveraged.
B) A leveraged company is more risky than a company that is not leveraged.
C) A company that uses debt magnifies the return to its shareholders.
D) An all-equity company has no risk.

Question

Quizplus · Accepted Answer

An all-equity company still has risk, because factors such as industry and economic conditions can impact its performance. However, it may have lower financial risk compared to a highly leveraged company.

Which One of the Following Statements Is NOT Correct