Which of the following statements is true of financial leverage?
A) It indicates earnings per dollar invested by the owners of the company.
B) It is the use of debt in a firm's capital structure.
C) It indicates how much net income a firm earned per share of common stock outstanding.
D) It is the net income per share of common stock outstanding.

Question

Quizplus · Accepted Answer

Financial leverage refers to the use of debt to acquire additional assets, which is reflected in a firm's capital structure.

Which of the Following Statements Is True of Financial Leverage