The Main Advantage of Financial Leverage Is That

question 67

Multiple Choice

The main advantage of financial leverage is that:

• A) it forgoes the need for companies to pay their creditors.
• B) it protects companies from going bankrupt.
• C) it magnifies the financial return on the investment of stockholders when times are good.
• D) it protects companies from predatory lending practices by financial institutions.

---

Definitions:

Skills Approach

A perspective on leadership that implies the effectiveness of a leader is directly related to the skills and abilities they possess.

High Predictive Value

The characteristic of an assessment or test indicating how effectively it can predict future outcomes, behaviors, or success.

Intuitively Appealing

Describes ideas or concepts that are immediately attractive or understandable without the need for deep reflection or analysis.

Leader Traits

Personal characteristics and inherent qualities possessed by individuals which predispose them to be leaders.