What Is the Main Advantage of Financial Leverage

question 59

Multiple Choice

What is the main advantage of financial leverage?

• A) It reduces the firm's interest expense.
• B) It increases the expected return to shareholders.
• C) It reduces the amount of risk the firm faces.
• D) It provides the firm with more flexible financing.

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Definitions:

Sensors

Devices or instruments that detect and respond to some type of input from the physical environment, such as light, heat, motion, moisture, pressure, or any one of a great number of other environmental phenomena.

Power Steering Fluid

The hydraulic fluid used in the power steering system to transmit the power needed to assist in steering the vehicle.

Automatic Transmission Fluid

A type of oil specially formulated for use in automatic transmissions to lubricate, clean, and cool internal components.

General Purpose

Designed for a variety of uses or tasks rather than specialized functions, applicable to many situations.