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| Sylvan Corporation has the following capital structure.
Debenture bonds: $10,000,000
Preferred equity: $1,000,000
Common equity: $39,000,000
The financial leverage of Sylvan Corporation would increase as a result of: A. Financing its future investments with a higher percentage of bonds. B. Financing its future investments with a higher percentage of equity funds. C. Maintaining the same dollar level of cash dividends as the prior year, even though earnings have increased by 7%. D. Issuing common stock and using the proceeds to retire preferred stock. |