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.

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Definitions:

Social Learning Theory

A theory proposing that new behaviors can be acquired by observing and imitating others.

Vicarious Experience

Experiencing something indirectly, through another person's experiences, rather than directly through one's own actions.

Learning

The process through which experience causes a change in knowledge, behavior, or potential behavior.

Rewarded Behaviour

A consequence or incentive given to promote a desired action or conduct.