A Company That Reports High Levels of Common Equity Leverage

question 60

Multiple Choice

A company that reports high levels of common equity leverage is probably

• A)reporting higher earnings per share than other companies in the same industry.
• B)meeting its financing needs effectively.
• C)using leverage very effectively.
• D)demonstrating it has a large amount of off-balance-sheet financing.

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Definitions:

Marginal Utility

The additional satisfaction or utility that a consumer receives from consuming one more unit of a good or service.

Total Utility

The total satisfaction received by consuming a certain amount of goods or services.

Marginal Utility

The additional satisfaction or utility gained from consuming one more unit of a good or service.

Total Utility

The overall satisfaction or benefit a person receives from consuming a particular quantity of goods or services.