Leverage is the amount of ________ on a firm's balance sheet.
A) equity
B) debt
C) preferred stock
D) retained earnings

Question

Quizplus · Accepted Answer

Leverage refers to the use of debt financing to increase the potential return on investments. Therefore, the correct option is debt, as it represents the amount of borrowed money a company has on its balance sheet. The other options, equity, preferred stock, and retained earnings, are types of equity financing, which do not represent leverage.

Leverage Is the Amount of ________ on a Firm's Balance