w Waleceuvy mancial leverage. d.initialy increases but then decreases as financialleverage rises. QUESTION 6 1 In the MMmode, the risk of bankruptcy: a. reduces the presentvalue ofthetax shield of debt. b.reduces the positive effect of financialleverage on fimm value. c. eliminates the possibility of a net positive effectoffinancialleverage on fi d.hasno impact onthe relationship between financialleverage and firm valu e. a andb