Generally, Increases in Leverage Result in Increased Return and Risk

question 145

True/False

Generally, increases in leverage result in increased return and risk, whereas decreases in leverage result in decreased return and risk.

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Definitions:

General Electric

General Electric is a multinational conglomerate corporation operating in sectors like aviation, power, renewable energy, and healthcare.

Ending Inventory

The pricing of available merchandise at the termination of an accounting interval, computed by taking the starting inventory, adding buying costs, and subtracting the cost of goods sold.

Net Income

The total earnings of a company after all expenses and taxes have been subtracted from total revenue.

Direct Materials

The essential components or raw inputs used directly in the manufacture of goods, critical to the production process.