Question: What is the normal relationship between financial leverage, solvency and financial flexibility? ....and please explain why? A. as leverage increases, solvency improves and flexibility decreases.

What is the normal relationship between financial leverage, solvency and financial flexibility? ....and please explain why?

A. as leverage increases, solvency improves and flexibility decreases.

B. as leverage increases, solvency decreases and flexibility improves.

C. as leverage increases, both solvency and flexibility improve.

D. as leverage increases, both solvency and flexibility decrease.

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