The Lowest Degree of Correlation Shown Below Is _________

question 74

Multiple Choice

The lowest degree of correlation shown below is _________.

• A) 0.75
• B) - 0.33
• C) - 0.25
• D) 0.15

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Definitions:

Financial Leverage

The use of borrowed funds to increase the potential return of an investment, which also increases the risk of loss.

EPS

Earnings Per Share, a financial ratio that indicates the portion of a company's profit allocated to each outstanding share of common stock.

Target Capital Structure

The ideal mix of debt, equity, and other financing sources a company aims to maintain to fund its operations and growth.

Optimal Capital Structure

The most favorable mix of debt and equity financing that minimizes the company's cost of capital and maximizes its value.