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As a Company Increases Its Financial Leverage, Improvements in ROE

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True/False

As a company increases its financial leverage, improvements in ROE and EPS result from the fact that it pays more for the use of borrowed money than it earns from the money.


Definitions:

Cohabitation

The condition of cohabiting and engaging in a sexual relationship without the bond of marriage.

Cohabitants

People in a romantic partnership cohabiting without formal marriage.

Divorced

The state of being legally separated from one’s spouse, following the dissolution of a marriage.

Cohabiting Couples

Couples living together in a long-term relationship without being married.

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