Which of the Following Situations Represents a Successful Use of Financial

question 148

Multiple Choice

Which of the following situations represents a successful use of financial leverage?

• A) A firm issues new shares of stock and uses the proceeds from the sale to retire its outstanding debt.
• B) A firm borrows money at 8% and earns an 11% return on its investment of these funds.
• C) A firm attracts the interest of two venture capitalists and plays one against the other to gain the best deal.
• D) A retail firm purchases merchandise at $10 and sells it for $15.

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Definitions:

Trial Close

A technique used in sales to gauge a prospect's readiness to buy, typically by asking a question that assumes the sale.

Relationship Selling

A sales technique that focuses on building long-term relationships with customers rather than just making immediate sales.

Core Principle

A fundamental belief or value that is foundational to the functioning and identity of an organization or system.

Sales Personnel

Individuals employed by companies to sell products or services to customers, including sales representatives, agents, and consultants.