For a given firm, management can decide its capital structure (i.e. which mix of debt and equity is being used to finance the firm). By doing so, management determines the financial leverage of the firm. Which below statement is correct? a. Decreasing the proportion of cheaper debt being used in the capital structure of a given firm will likely increase the expected return on equity, but also lead in a parallel manner to an increase to the risk borne by equity. b. Decreasing the proportion of cheaper debt being used in the capital structure of a given firm will likely decrease the expected return on equity, but also lead in a parallel manner to an increase to the risk borne by equity. c. Decreasing the proportion of cheaper debt being used in the capital structure of a given firm will likely increase the expected return on equity, but also lead in a parallel manner to a decrease to the risk borne by equity. d. Decreasing the proportion of cheaper debt being used in the capital structure of a given firm will likely decrease the expected return on equity, but also lead in a parallel manner to a decrease to the risk borne by equity. a. 5,539,286 b. 3,333,333 c. 6,428,571 d. 5,464,286 For a given firm, if management decides to decrease the unit production cost (a variable cost) by investing in additional equipment and automation (a fixed cost), which below statement is correct? a. The break-even point will decrease, likely resulting in less operating risk for the firm. b. The break-even point will decrease, likely resulting in less financial risk for the firm. c. The break-even point will increase, likely resulting in additional operating risk for the firm. d. The break-even point will increase, likely resulting in additional financial risk for the firm