How does the debt$-$to$-$equity ratio affect the levered beta of a company, assuming all other factors are held constant?

Question $2$Answer

a$.$

Increasing debt$-$to$-$equity ratio increases levered beta.

b$.$

Debt$-$to$-$equity ratio has no effect on levered beta.

c$.$

The relationship between debt$-$to$-$equity ratio and levered beta is unpredictable.

d$.$

Increasing debt$-$to$-$equity ratio decreases levered beta.