Positive Financial Leverage Occurs in Which of the Following Situations

Multiple Choice

Positive financial leverage occurs in which of the following situations?

A) The company's after-tax return on total assets is less than the after-tax cost of borrowing.
B) Payment of resources to creditors is limited to the required interest payments while the return of the principal borrowed is not required.
C) The return to the owners is enhanced through the use of debt financing.
D) Interest payments can be deducted for income tax purposes.