How are high levels of gearing likely to affect managers' motivation?
A) The resulting low level of debt discourages managers.
B) The resulting low level of debt encourages managers to perform better.
C) The resulting high level of debt discourages managers.
D) The resulting high level of debt encourages managers to perform better.

Question

Quizplus · Accepted Answer

High levels of gearing indicate a high level of debt, which can motivate managers to perform better to ensure the company meets its debt obligations and maintains financial stability.

How Are High Levels of Gearing Likely to Affect Managers