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Question 7 (10 marks) A firm increases its financial leverage when its ROA is greater than the cost of debt. Everything else equal, this change

Question 7 (10 marks) A firm increases its financial leverage when its ROA is greater than the cost of debt. Everything else equal, this change will probably increase the firms: (I) Beta (II) Earnings variability over the business cycle (III) ROE A) I, II, and III B) III only C) II and III only D) I and II only E) I and III only

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