Leverage Increases the Potential Return to a Firm's Shareholders,but Also

question 37

True/False

Leverage increases the potential return to a firm's shareholders,but also reduces the risk of their investment because shareholders have contributed less capital.

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Definitions:

Inconsistency

The state of being not consistent, displaying variations in quality, performance, or responses over time.

Incentives

Rewards or benefits offered to encourage specific behaviors or actions.

Derogatory

Expressing a low opinion or negative judgment intended to diminish the value, reputation, or esteem of a person or thing.

Employee's Demeanor

The way an employee behaves or conducts themselves at work, which can reflect on their professionalism and the company's image.