Question: Why does adding debt to a firm's capital structure make the firm's equity more risky? a. It increases the financial risk of the company b.

Why does adding debt to a firm's capital structure make the firm's equity more risky?

a. It increases the financial risk of the company

b. It increases the business risk of a company

c. it reduces the variability of the income to equity holders

d. it decreases the probability of financial distress

e. None of the above

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