More debt than equity financing results in higher potential return on investment for owners.

Name: More debt than equity financing results in higher potential return on investment for owners.
Brand: Quizplus
Rating: 4.9 (33 reviews)

Question

Quizplus · Accepted Answer

This statement is true. When a company uses more debt financing than equity financing, it increases the leverage of the company, which can result in higher potential return on investment for the owners. However, it also increases the risk associated with the investment.

More Debt Than Equity Financing Results in Higher Potential Return