Financial Leverage Is Negative in Which of the Following Situations

question 104

Multiple Choice

Financial leverage is negative in which of the following situations?

• A) When the return on total assets is less than the rate of return on common shareholders' equity.
• B) When total liabilities are less than shareholders' equity.
• C) When total liabilities are less than total assets.
• D) When the return on total assets is less than the rate of return demanded by creditors.

---

Definitions:

Posterior Neck Muscles

The group of muscles located at the back of the neck, including the trapezius and the splenius muscles, responsible for movements of the head and shoulders.

Abduction

Movement away from the midline.

Adduction

The movement of a body part toward the body's midline.

Rotation

Movement of a structure about its axis.