Which of the Following Would Cause a Well-Run Company to Become

question 42

Multiple Choice

Which of the following would cause a well-run company to become highly leveraged?

• A)when the money that the company can earn investing the money that it borrows is equal to the cost of borrowing
• B)when the money that the company can earn investing the money that it borrows is significantly less than the cost of borrowing
• C)when the money that the company can earn investing the money that it borrows is significantly greater than the cost of borrowing
• D)when the money that the company can earn investing the money that it borrows is equal to more than half of the cost of borrowing