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of the following statements is correct with respect to the use of financial leverage in a private family owned business versus a publicly traded firm?

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of the following statements is correct with respect to the use of financial leverage in a private family owned business versus a publicly traded firm? The incentive to use financial leverage is lower in a publicly traded firm, because the increase in risk is not tolerated by equity holders None of the answers is correct The incentive to use financial leverage is higher in a privately held firm, because debt increases the return on equity (ROE) The incentive to use financial leverage is lower in a privately held firm, because debt increases the unsystematic risk The incentive to use financial leverage is higher in a privately held firm, because debt leverages to income for the owner

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