Which Statement Is Not Correct About Financial Leverage

question 72

Multiple Choice

Which statement is not correct about financial leverage?

• A)There are many ways to calculate financial leverage.
• B)It represents the relative debt to a company's equity base.
• C)It allows a shareholder to increase their return on equity.
• D)There is only one way to calculate financial leverage.

---

Definitions:

Petty Cash Fund

A small amount of cash on hand used for covering minor expenses, managed through a system of vouchers to maintain control.

Depositor's Bank Account

An account maintained by an individual at a bank in which they can deposit or withdraw funds.

Bank Fee

Charges imposed by banks for various services or as penalties for not meeting certain banking requirements.

Petty Cash Fund

A small amount of cash kept on hand for making immediate payments for minor expenses.