Examlex
All of the following statements are true EXCEPT:
Leverage
The use of borrowed funds to increase one's investment capacity and potentially increase the rate of return on equity.
Interest Rate
The percentage charged on a loan or paid on deposits, representing the cost of borrowing or the income from lending.
Pre-Tax Cost
The expense or cost associated with an activity or asset before taxes are deducted.
Debt-Equity Ratio
A measure used to evaluate a company's financial leverage, calculated by dividing its total liabilities by stockholders' equity.
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