Financial Leverage Is the Use of Borrowed Funds to Increase

question 13

True/False

Financial leverage is the use of borrowed funds to increase the return on owners' equity.

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Definitions:

Short-Term Financing

A type of funding intended to meet immediate and temporary financial needs of a business.

Corporate Debt Securities

Financial instruments issued by corporations to borrow money from investors.

Security Sold Privately

A financial instrument, such as a stock or bond, that is sold directly to investors rather than through a public market.

Directly

Pertains to having an immediate connection or interaction without any intermediaries.