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Basic Question 1 of 6
Which statement is false? A. The risk-return profile for equity holders is 100% downside and 100% upside.
B. Higher leverage increases the risks for debt and equity holders.
C. Management generally seeks to maximize equity value and thus may take actions that are unfavorable to debtholders.
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Learning Outcome Statements
compare the financial claims and motivations of lenders and shareholders
CFA® 2025 Level I Curriculum, Volume 2, Module 2.