Since high use of financial leverage is associated with less risk, higher financial leverage may also result in higher stock prices.

Name: Since high use of financial leverage is associated with less risk, higher financial leverage may also result in higher stock prices.
Brand: Quizplus
Rating: 4.9 (31 reviews)

Question

Quizplus · Accepted Answer

Higher financial leverage increases the risk of bankruptcy and financial distress, which can cause a decline in stock prices. Therefore, the statement is false.

Since High Use of Financial Leverage Is Associated with Less