The Use of Homemade Leverage

question 112

Multiple Choice

The use of homemade leverage:

• A) Optimizes the profitability of a firm.
• B) Minimizes the weighted average cost of capital for a firm.
• C) Makes the capital structure of a firm irrelevant.
• D) Is effective only when investors own shares of all-equity firms.
• E) Increases the debt-equity ratio of a firm.

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