Which of the Statements Below Is FALSE

question 40

Multiple Choice

Which of the statements below is FALSE?

• A)When a company performs well,it can handle more debt and benefit the owners.
• B)Borrowing from debt lenders at one rate and investing the money in the business and making a higher rate is bad for the owners.
• C)Assume that the more debt the company has sold,the better off the shareholders are.This is the case where the earnings reflect a return greater than the cost of debt.
• D)Financial leverage is the degree to which a firm or individual utilizes borrowed money to make money.

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Definitions:

Pre-capitalist

Describing economic and social systems that existed before the widespread adoption of capitalist principles.

Capitalism

An economic system based on private ownership of the means of production and the creation of goods and services for profit in competitive markets.

Lone Parenting

The act of raising children by a single parent, without the support or partnership of the other biological parent.

Singlehood

The state of being unmarried or not involved in a romantic relationship.