Solved

A Company Whose Rate of Return on Investments Is Higher

Question 110

Multiple Choice

A company whose rate of return on investments is higher than the interest rate on its debt is said to have

A) unfavorable financial leverage.
B) a sub-optimal capital structure.
C) favorable financial leverage.
D) negative financial leverage.

Related Questions

Q105: As a general rule, the optimal capital

Q106: The Modigliani and Miller Capital Structure Theorem,

Q107: Which of the following is part of

Q108: Weaknesses of the EBIT-EPS analysis include<br>A) that

Q109: Suppose we calculate a times interest earned

Q111: An optimal capital structure is achieved<br>A) when

Q112: Sunshine Candy Company's capital structure for the

Q113: When using an EPS-EBIT chart to evaluate

Q114: A firm's financial structure is defined by

Q115: An increase in the _ is likely