A corporation has concluded that its financial risk premium is too high. In order to decrease this, the firm can
A. increase the proportion of long-term debt to decrease the cost of capital.
B. increase short-term debt to decrease the cost of capital.
C. decrease the proportion of common stock equity to decrease financial risk.
D. increase the proportion of common stock equity to decrease financial risk.
Answer:D
A corporation has concluded that its financial risk premium is too high. In order to decrease this, the firm can
A. increase the proportion of long-term debt to decrease the cost of capital. B. increase short-term debt to decrease the cost of capital. C. decrease the proportion of common stock equity to decrease financial risk. D. increase the proportion of common stock equity to decrease financial risk.