A Company Whose Rate of Return on Investments Is Higher

question 46

Multiple Choice

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

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

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Definitions:

Political Balance

Refers to the equilibrium achieved within a political system when power is evenly or appropriately distributed among various parties or branches of government, avoiding dominance by any single entity.

Nominations

The act of formally proposing a candidate for a position, award, or office, often within the context of politics, entertainment, and other fields.

$4 Trillion Debt

A monetary amount representing the scale of owed funds, possibly pertaining to national debt or a significant financial obligation of a large entity.

Ongoing Costs

Continuous or recurring expenses associated with maintaining a project, venture, or lifestyle, which do not end after the initial purchase or investment.