The financial leverage multiplier is an indicator of a corporation utilizing
A) current liabilities.
B) financial leverage.
C) long-term debt.
D) operating leverage.

Question

Quizplus · Accepted Answer

The financial leverage multiplier is a measure of a company's financial leverage or the amount of its total debt compared to its equity. It is calculated as total assets divided by total equity. Thus, this multiplier indicates the level of financial risk a company is taking by using debt financing.

The Financial Leverage Multiplier Is an Indicator of a Corporation