If a company is using leverage successfully, which of the following will result?

Question

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Using leverage successfully means that the company is able to use borrowed funds to generate higher returns than the cost of borrowing. This will increase their net income and ultimately result in a higher ROE (return on equity) for shareholders. Choice (B) is incorrect because a successfully leveraged company will have a higher ROE, not a lower one. Choice (C) may or may not be true depending on the specific terms of the borrowing. Choice (D) is also incorrect because a successfully leveraged company will have higher net income, not lower.

If a Company Is Using Leverage Successfully, Which of the Following