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:

Eukaryotes

Organisms whose cells contain a nucleus surrounded by a membrane.

Nutrients

Compounds that offer essential nourishment needed for life growth and preservation.

Inclusive Taxon

A classification grouping that includes all the descendant species of a common ancestor.

Domain

In biology, it refers to the highest taxonomic rank in the classification of organisms, above kingdom; in other contexts, it can denote a realm of expertise, activity, or knowledge.