Multiple Choice
Which of the following transactions will lower a company's financial leverage?
A) A mortgage loan is obtained and the proceeds are used to pay off existing short-term debt.
B) Preferred stock is sold and the proceeds are used to pay off existing short-term debt.
C) Common stock is sold and the proceeds are used to pay off existing short-term debt.
D) Short-term debt is obtained to get the company through a period of negative net income and cash flow.
Correct Answer:
Verified
Correct Answer:
Verified
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