Use the Factoring Method to Solve the Equation

question 3

Multiple Choice

Use the factoring method to solve the equation.

• A) ,
• B) ,
• C) ,
• D) ,
• E) ,

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Definitions:

Financial Leverage

The use of borrowed funds with the goal to increase the potential return on investment.

Leveraged Firm

A company that uses debt along with equity to finance its assets, often resulting in higher potential returns but also higher risk.

ROE

Return on Equity, a financial ratio indicating the profitability of a corporation in relation to stockholders’ equity, showing how well the company uses investments to generate earnings growth.

EPS

Earnings Per Share, a company's profit divided by the number of outstanding shares of its common stock, indicating the company's profitability.