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If you capitalize operating leases and treat them as debt, which of the following will always occur?

If you capitalize operating leases and treat them as debt, which of the following will always occur?

a)The cost of equity will increase because of the higher debt ratio.

 

b) The operating income will increase because you will be adding back operating lease expenses.

 

c)The debt ratio will increase.

 

d)The return on capital will increase.

 

e) None of the above.

Top Answer

a)The cost of equity will... View the full answer

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