Why Is Debt Often Referred to as Leverage in Finance

question 1

Multiple Choice

Why is debt often referred to as leverage in finance?

• A)Debt magnifies the firm's total asset turnover.
• B)Debt magnifies both the potential returns and the risk to bondholders.
• C)Debt magnifies both the potential returns and the risk to equity holders.
• D)None of these.

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Definitions:

Sexual Disorders

A category of mental health conditions that involve significant difficulties in sexual functioning, desire, performance, or satisfaction.

Masturbatory Satiation

A behavioral therapy technique involving excessive masturbation to reduce the frequency of deviant sexual arousal.

Transvestism

The practice of dressing and acting in a style or manner traditionally associated with the opposite sex, primarily for personal expression or satisfaction.

Premature Ejaculation

A dysfunction in which a man persistently reaches orgasm and ejaculates within one minute of beginning sexual activity with a partner and before he wishes to. Also called early or rapid ejaculation.