A decrease in contractual managers' salaries will result in:
A)an increase in the degree of financial leverage
B)a decrease in the degree of financial leverage
C)no change in the degree of financial leverage

Question

Quizplus · Accepted Answer

A decrease in contractual managers' salaries would not have any direct impact on a company's financial leverage, which is determined by the ratio of debt to equity financing. Therefore, there would be no change in the degree of financial leverage.

A Decrease in Contractual Managers' Salaries Will Result In