Under Which of the Following Conditions Could the Overuse of Financial

question 26

Multiple Choice

Under which of the following conditions could the overuse of financial leverage be detrimental to the firm?

• A) In a stable industry.
• B) When there is cyclical demand for the firm's products.
• C) During an upswing in the business cycle.
• D) When there is low interest cost compared to return on assets.

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