Using debt and preferred stock in the capital structure of a firm will _____. select one:
a. increase financial risk
b. decrease business risk
c. increase the tax payable by the firm.
d. decrease operating leverage
e. increase the book value of common stoc
It will increase the financial risk of a company. This can make it so that a company goes further in debt, and can impact the profit that a company makes as it can increase the debt so much that the profit cannot overcome the debt.
