Which of the Following Situations Represents a Successful Use of Financial

question 148

Multiple Choice

Which of the following situations represents a successful use of financial leverage?

• A) A firm issues new shares of stock and uses the proceeds from the sale to retire its outstanding debt.
• B) A firm borrows money at 8% and earns an 11% return on its investment of these funds.
• C) A firm attracts the interest of two venture capitalists and plays one against the other to gain the best deal.
• D) A retail firm purchases merchandise at $10 and sells it for $15.

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Definitions:

Psychologist

A Psychologist is a professional specializing in the study of the mind and behavior, often working in research, education, health, and therapy to understand and support human welfare.

Personality Assessment

The measurement of personal characteristics through tools and processes, aimed at understanding individual differences in personality.

Characteristic Pattern

Repeated behaviors or actions that are distinctive and typical of an individual or group.

Extraversion

A personality trait characterized by outgoingness, high energy, sociability, and a tendency to seek stimulation in the company of others.