Which Statement Is Correct About Financial Leverage

question 35

Multiple Choice

Which statement is correct about financial leverage?

• A)It reduces the risk of bankruptcy to the company.
• B)It reduces the level of risk exposure of the shareholders.
• C)It quantifies the relationship between the relative level of a firm's debt and its equity base.
• D)It has nothing to do with the relationship between the relative level of a firm's debt and its equity base.

---

Definitions:

Jeffrey Pfeffer

is a prominent professor and author in the field of organizational behavior, known for his work on power and business strategy.

Employee Turnover

The rate at which employees leave a company and are replaced by new personnel, often used as an indicator of workplace satisfaction and stability.

Project Oxygen

An initiative by Google to determine what makes a manager effective, identifying key traits and behaviors that drive performance.

Skill Set

A collection of skills and abilities that an individual possesses, which are relevant to a specific job or task.