Levered equity has Blank______ risk than unlevered equity.Multiple choice question.greaterthe sameless
Question
Levered equity has Blank______ risk than unlevered equity.Multiple choice question.greaterthe sameless
Solution
The correct answer is "greater". Levered equity has greater risk than unlevered equity. This is because levered equity involves the use of debt, which increases the financial risk. If a company cannot meet its debt obligations, it could go into bankruptcy. Therefore, the risk is higher with levered equity.
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