An increase in the financial leverage of a firm as a result of an increase in outstanding debt has which effect on the potential reward to stockholders while increasing the risk of financial distress or bankruptcy?

Group of answer choices

It decreases the potential reward to stockholders while increasing the risk of financial distress or bankruptcy.

It increases the potential reward to stockholders while increasing the risk of financial distress or bankruptcy.

It does not affect the potential reward to stockholders while increasing the risk of financial distress or bankruptcy.

There is not enough information to answer the question.