Question: 18 10 points Increase in financial leverage 1. increases expected ROE but does not affect its variability. II. increases expected return and risk to owners.

18 10 points Increase in financial leverage 1. increases expected ROE but does not affect its variability. II. increases expected return and risk to owners. III. decreases times interest earned. IV. reduces sustainable growth rate 0 I and III O III and IV II, and III O ll only

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