Multiple Choice
Which of the following situations represents a successful use of financial leverage?
A) A firm issues new shares of stock and uses the proceeds from the sale to retire its outstanding debt.
B) A firm borrows money at 8% and earns an 11% return on its investment of these funds.
C) A firm attracts the interest of two venture capitalists and plays one against the other to gain the best deal.
D) A retail firm purchases merchandise at $10 and sells it for $15.
Correct Answer:
Verified
Correct Answer:
Verified
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