Question $25(1$ point$)$

Roch Ltd$.$ is considering a plan to invest more heavily in automated production machinery at its current location. To do this, the company will have to take on substantial debt.

Which of the following is the expected impact of this change in capital structure on Roch's degree of financial leverage?

a$)$ No change

b$)$ A decrease

c$)$ An increase

d$)$ Cannot be determined unless the cost of equity is known