The Concept of Leveraging in Finance Refers to ________

question 32

Multiple Choice

The concept of leveraging in finance refers to ________.

• A)the degree to which companies rely on foreign exchange to fund operations
• B)how a company hedges its foreign currency obligations
• C)the degree to which a firm funds the growth of a business by debt
• D)how much cash the CFO has in the bank

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Definitions:

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life in a systematic manner.

Cash Dividend

A payment made by a company out of its profits to shareholders, typically in cash, representing a portion of the earnings allocated to each share of stock.

Stock Dividend

A distribution of additional shares of a company to its shareholders, instead of cash, usually based on a fixed ratio to the existing shares held.

Interest Expense

Interest expense is the cost incurred by an entity for borrowed funds.