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:

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An approach in assessment that pragmatically considers the limitations, resources, and potential outcomes of a project or situation.

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