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.


Answer: C

Business

You might also like to view...

A widely used method of allocating merchandise cost that assumes the first merchandise bought is the first merchandise sold is called the first-in, first-out method

a. True b. False Indicate whether the statement is true or false

Business

A peer-to-peer LAN is one in which no central device controls communications.

Answer the following statement true (T) or false (F)

Business

Through its CRM program, an online clothing company records information about each time a customer makes a purchase or clicks on a link through an email or an online advertisement. These interactions are examples of ________

A) customizations B) touchpoints C) analytics D) optimizations E) impressions

Business

A firm with a conservative financial leverage ratio has _____

a. a lot of debt relative to assets b. little debt relative to assets c. no debt d. high return on net worth

Business