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Question
As the corporation uses more debt financing, which of the following holds true for the stockholders?A. The expected return to the stockholders decreases and the standard deviation of that return decreases.
B. The expected return to the stockholders increases and the standard deviation of the return decreases.
C. The expected return to the stockholders increases and the standard deviation of the return increases.
D. The expected return to the stockholders decreases and the standard deviation of the return increases.
Answer
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