Leverage Occurs When a Company's

question 40

Multiple Choice

Leverage occurs when a company's

• A)interest payments exceed its rate of return
• B)rate of return equals its interest payments
• C)rate of return exceeds its interest payments
• D)interest payments are made on time

---

Definitions:

Marginal Utility

The change in total utility generated by consuming one additional unit of a good or service.

Uncertain Income

Income that is not guaranteed or predictable, often varying significantly over time or depending on specific conditions.

Constant

A value that does not change and remains steady within a specified context.

Expected Value

The anticipated value for an investment or gamble, calculated as the sum of all possible outcomes weighted by their associated probabilities.