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Match the Following Definitions with the Correct Terms

question 16

Multiple Choice

Match the following definitions with the correct terms.
-Association of new information with already stored knowledge and analysis of the new information to make it memorable.


Definitions:

Fixed-cost Financing

Refers to the method of raising capital where the company incurs fixed financial charges, such as interest on bonds or dividends on preferred stock, regardless of its financial performance.

Financial Leverage

A strategy involving the use of borrowed money to increase the potential return of an investment.

Operating Leverage

The use of fixed as opposed to variable cost in a firm’s cost structure.

Combined Leverage

Refers to the use of both operating and financial leverage by a company to assess the potential impact on earnings due to changes in sales.

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