The Less Fixed-Cost Debt (Financial Leverage) a Firm Uses, the Greater

question 53

True/False

The less fixed-cost debt (financial leverage) a firm uses, the greater will be its risk and return.

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Definitions:

Faulty Part

A defective or malfunctioning component in a machine or system.

Seal

A device or stamp used to imprint a design on a document as a form of authentication or to signify a formal agreement.

Multinational

A corporation or enterprise that operates and has facilities or other assets in at least one country other than its home country.

Free Enterprise

An economic system where private business operates in competition and largely free of state control.