What Does the Term Financial Leverage Mean

question 160

Multiple Choice

What does the term financial leverage mean?

• A) The ability of a company to generate cash flows
• B) The amount of profit earned by one share of common stock
• C) The ability of a company to pay off its current liabilities
• D) The proportion of a company's total capital that is financed by debt, as opposed to equity

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Definitions:

Remedial Measures

actions taken to correct or improve a situation or a behavior.

Common Ground

Shared interests, beliefs, or knowledge that make communication and understanding easier between people.

Generalities

Statements or ideas that are broad and vague, lacking specific detail or focus on particular instances.

Scaling Motivation

The process of increasing or adjusting one's level of motivation towards achieving a particular goal or task.