Multiple Choice
Which of the following statements are correct in regards to financial leverage?
A) Financial leverage is said to be 'negative' if the rate of return is higher than the borrowing rate.
B) Financial leverage is said to be 'positive' if the rate of return is lower than the rate of borrowing.
C) Financial leverage is borrowing at one rate and investing at a different rate.
D) Financial leverage can decrease the return on equity.
Correct Answer:
Verified
Correct Answer:
Verified
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