Successful Use of Financial Leverage Requires a Firm to

question 191

Multiple Choice

Successful use of financial leverage requires a firm to

• A) negotiate with lenders to establish a line of credit.
• B) establish and operate a venture capital organization to minimize the use of equity financing.
• C) register with the local government commission that administers market leverage.
• D) earn a higher return on its investments than the interest rate it pays to acquire funds.

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Definitions:

Subsidiaries

Companies that are fully or partially owned and controlled by another company, known as the parent company.

Transaction Costs

Expenses incurred during the exchange of goods or services, beyond the price of the goods or services themselves.

Integrative IHRM Approach

A holistic method in international human resource management that combines several aspects of HR practices across multiple countries to achieve global objectives.

Home HR Practices

Human resources policies and practices that are applied within an organization, tailored to its culture and operational requirements.