Question: Consider three financing alternatives: a. Alternative 1: All equity financing i. ii. b. Alternative 2: Financing with 50% debt, 50% equity c. Alternative 3:

Consider three financing alternatives: a. Alternative 1: All equity financing i. ii. b. Alternative 2: Financing with 50% debt, 50% equity c. Alternative 3: All debt financing Which of the above financing alternatives involves the greatest financial leverage? Why? (5 pts.) Which of the above financing alternatives involves the least financial leverage? Why? (5 pts.)

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