Which Statement Is Correct About Financial Leverage

question 34

Multiple Choice

Which statement is correct about financial leverage?

• A)It reduces the risk of bankruptcy to the company.
• B)It reduces the level of risk exposure of the shareholders.
• C)It represents the relative assets to a company's equity base.
• D)It represents the relative debt to a company's equity base.

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Definitions:

Positive Self-talk

The practice of making affirmative or supportive statements to oneself to improve confidence and reduce negative feelings.

Scientific Management

A management theory focusing on improving economic efficiency, especially labor productivity, through scientific methods.

Membership-based Rewards

Benefits or incentives provided to individuals based on their affiliation or status within a group or organization.

Fredrick Taylor

Known as the father of scientific management, he introduced efficiency techniques and principles in the management of work and workers.