Practicing Success

Target Exam

CUET

Subject

Business Studies

Chapter

Financial Management

Question:
Which of the following statements is NOT true?
Options:
Increased use of debt increases the financial risk of a business.
Increased use of debt is likely to lower the over-all cost of capital of the firm
Decrease in use of debt increases the financial risk of a business.
None of the above
Correct Answer:
Decrease in use of debt increases the financial risk of a business.
Explanation:
Decrease in use of debt decreases the financial risk of a business.