An Increase in the Financial Leverage of a Firm Will

question 20

True/False

An increase in the financial leverage of a firm will generally increase the variability in EPS for the firm.

---

Definitions:

Market Value

The price at this moment for buying or selling an asset or service in the market.

Shares Held

Refers to the quantity of stock units owned by an individual or entity at any given time.

Volatile Stock

Shares of a company that exhibit significant fluctuations in price over short periods of time due to various factors.