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Home Questions MX6ZYEEBZU
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:

The correct answer is option 3- Decrease in use of debt increases the financial risk of a business.

The statement that is NOT true is "Decrease in use of debt increases the financial risk of a business." as decreasing the use of debt would lower financial risk, not increase it.

CUET Questions