What Is Financial Leverage

question 81

Multiple Choice

What is financial leverage?

• A) The presence of fixed operating costs that do not change when the level of sales changes
• B) The portion of stockholders' risk, over and above basic business risk
• C) The risk associated with afirm's operations, ignoring any financing effects
• D) The combination of debt and equity used to finance a firm
• E) The extent to which fixed-income securities are used in a firm's capital structure

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Definitions:

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