Financial Leverage Refers to Which of the Following

question 10

Multiple Choice

Financial leverage refers to which of the following?

• A)The difference between the rate of return earned on assets (ROI)and the rate of return earned on stockholders' equity (ROE).
• B)The difference between the rate of return earned on current assets and the rate of return earned on retained earnings.
• C)The leverage a firm obtains from increasing production.
• D)Decreasing fixed costs per unit by increasing production.

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Definitions:

Need for Achievement

A personal drive in individuals leading them to pursue and attain challenging goals, often associated with a high level of ambition and effort to succeed.

Self-reliance

The ability to rely on one's own capabilities, resources, and judgments.

Status Quo

The existing state of affairs, particularly in terms of social or political issues.

Opportunity-driven

Entrepreneurship or actions motivated by the identification and exploitation of business opportunities.