JB Enterprises Borrows by Issuing Bonds

question 29

Multiple Choice

JB Enterprises borrows by issuing bonds. If JB earns more on an investment than the interest it pays on its bonds, JB is:

• A)trading on the equity.
• B)diluting control of its business.
• C)showing a leverage ratio of 1.0.
• D)decreasing its earnings per share on common stock.

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