Leverage _____ the Return to Shareholders and _____ the Risk

question 78

Multiple Choice

Leverage _____ the return to shareholders and _____ the risk of their investment.

• A)lowers; lowers
• B)lowers; increases
• C)increases; lowers
• D)increases; increases

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Definitions:

Less Independence

Referring to a decrease in freedom or autonomy in making decisions or carrying out actions without reliance on others.

Joint Venture

An agreement in which two businesses form a temporary partnership to produce a product or service in a market that neither could satisfy alone.

General Partnership

A business arrangement where two or more individuals share ownership, as well as the responsibility for managing the company and the liabilities it incurs.

Limited Partnership

A business organization with one or more general partners who manage the business and assume legal debts and obligations, and one or more limited partners who are liable only up to the amount of their investment.