A Company Whose Rate of Return on Investments Is Higher

question 110

Multiple Choice

A company whose rate of return on investments is higher than the interest rate on its debt is said to have

• A) unfavorable financial leverage.
• B) a sub-optimal capital structure.
• C) favorable financial leverage.
• D) negative financial leverage.

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Definitions:

Civil Law

A legal system focused on resolving disputes between individuals and organizations, concerning matters such as contracts, property, and family relationships.

Collection Of Rules

A set of guidelines or principles designed to govern behavior or procedures.

Conduct

The manner in which a person behaves, especially on a particular occasion or in a specific context.

Criminal Law

A system of laws concerned with punishment of individuals who commit crimes.