Choice "C" is correct. Financial leverage increases when the debt to equity ratio increases. Using a higher percentage of debt (bonds) for future investments would increase financial leverage.
Choice "a" is incorrect. This results in no change in total equity and, consequently, no change in financial leverage.
Choice "b" is incorrect. This would result in increased equity and decreased debt, which would decrease financial leverage.
Choice "d" is incorrect. This would increase equity, decrease the debt to equity ratio and decrease financial leverage.
