Which of the Following Statements Is True of Financial Leverage

question 109

Multiple Choice

Which of the following statements is true of financial leverage?

• A) It indicates earnings per dollar invested by the owners of the company.
• B) It is the use of debt in a firm's capital structure.
• C) It indicates how much net income a firm earned per share of common stock outstanding.
• D) It is the net income per share of common stock outstanding.

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Definitions:

Insurance Expense

The cost incurred by a business or individual for purchasing insurance coverage, recognized as an expense over the policy period.