Financial Leverage

question 5

Multiple Choice

Financial leverage:

• A)arises because most borrowed funds have a fixed interest rate.
• B)arises because most borrowed funds have a variable interest rate.
• C)usually has no bearing on the risk associated with a company.
• D)is a concept that does not apply to individuals.

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Definitions:

Vertical Coordination

The management and integration of activities or operations across different levels within an organization or supply chain.

Lateral Structures

Organizational configurations that emphasize an equal distribution of power and a more horizontal approach to management and communication.

External Environment

The conditions, entities, events, and factors surrounding an organization that influence its activities and choices, but are beyond its control.

Sociopolitical Environment

The division of the environment that includes the combined influence of societal and political factors affecting an organization or individual.