Please answer the following question:
Question 1: What are the implications of a change in the return on equity with an increase in debt financing?
Question 2: What is the relationship between business risk, financial risk, and beta (systematic or market risk).
Question 3: Explain how the degree of operating and financial leverage can change the profitability of the firm when sales levels change significantly. Use examples and explain your answers.
Note: Be sure to show how you arrived at your answer.