The Concept of Leverage Is

question 183

Multiple Choice

The concept of leverage is

• A) it is appropriate to borrow if the return on the assets is greater than the cost of the financing.
• B) it is appropriate to borrow as long as the lender approves the loan.
• C) it is unfavorable to borrow funds rather than raise the capital from stockholders.
• D) that a high debt-to-equity ratio is favorable.

---

Definitions:

Basic Trust

A fundamental sense of confidence in the reliability of the world and others, considered as a cornerstone of psychological development by Erik Erikson.

Secure Attachment

A form of attachment where individuals feel confident and trust in the availability and responsiveness of their caregivers.

Erik Erikson

A psychoanalyst and developmental psychologist recognized for his contributions to the theory of human beings' psychosocial evolution.

Stranger Anxiety

A form of distress that young children experience when exposed to unfamiliar people, typically observed between 6 to 12 months of age.