Which of the Following Statements Is True

Multiple Choice

Which of the following statements is true?

A) Financial leverage should not be considered when a firm borrows money.
B) Under the right circumstances, the use of borrowed money can improve a firm's return on owners' equity.
C) There is no good reason for a firm to borrow money when it has cash to finance expansion.
D) The use of borrowed money always reduces a firm's return on owners' equity.
E) Return on owners' equity is not an important financial calculation.