The Use of Debt Is Sometimes Described as Financial Leverage

question 19

True/False

The use of debt is sometimes described as financial leverage because debt can have the effect of increasing the return on equity.

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Definitions:

Interdependence

A situation in which two or more elements or systems rely on each other to function properly, often seen in economic, social, and ecological systems.

Economic

Pertaining to the production, consumption, and transfer of wealth in a region or society.

Cultural

Pertaining to the ideas, customs, social behaviors, and characteristics of a particular society, group, place, or time.

Technological

Relating to or involving technology, especially in regard to its development, use, or impact in society and business.