Given how financial leverage affects ROE, why does a firm not borrow as much as possible? That

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Given how financial leverage affects ROE, why does a firm not borrow as much as possible? That is, why doesn’t a firm increase borrowing to as close to 100% of financing as it can?

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Financial Accounting An Introduction to Concepts, Methods and Uses

ISBN: 978-1133591023

14th edition

Authors: Roman L. Weil, Katherine Schipper, Jennifer Francis

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Question Posted: Mar 04, 2014 05:42 AM

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Given how financial leverage affects ROE, why does a firm not borrow as much as possible? That

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A firm cannot continually increase the amount of debt in ...View the full answer

Financial Accounting An Introduction to Concepts, Methods and Uses

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