Which of the Following Statements Regarding Financial Leverage Are True

question 75

Multiple Choice

Which of the following statements regarding financial leverage are true.

• A) financial leverage reflects the amount of debt used in the capital structure of the firm.
• B) financial leverage primarily affects the right side of the balance sheet.
• C) financial leverage determines how the operation is to be financed.
• D) all of the above.

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Definitions:

Cognitive-Mediational Theory

A theory in psychology that proposes our emotions are determined by our appraisal of the stimulus, suggesting that thoughts mediate between stimuli and emotional responses.

Appraisal

The evaluation or estimation of the nature, quality, or importance of something or someone.

Extrinsic Motivation

The drive to perform an activity due to external rewards or pressures, rather than for the sake of enjoyment or intrinsic satisfaction.

Self-Actualization

Bringing to fruition one's inherent talents and possibilities, viewed as a basic hunger or impulse present in everyone.