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:

Military Buildup

The process of expanding and strengthening a country's armed forces through increased spending, recruitment, and development of weapons and technology.

Arms Talks

Negotiations between nations aimed at mutual reduction or control of military weapons and equipment.

Jay Treaty

The Jay Treaty was an agreement made in 1794 between the United States and Great Britain, aimed at settling outstanding issues since the Treaty of Paris in 1783, which had ended the American Revolutionary War, and facilitating ten years of peaceful trade.

Great Lakes

A group of five large, interconnected freshwater lakes located in North America on the Canada–United States border, constituting the largest group of freshwater lakes in the world by total area.