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11. Financial gearing(leverage) occurs when a business is financed by contributions from borrowings. Which of the following statements is TRUE about financial gearing? A) Gearing

11. Financial gearing(leverage) occurs when a business is financed by contributions from borrowings. Which of the following statements is TRUE about financial gearing?

A) Gearing reduces the risk to shareholders.

B) Gearing involves the company taking loans that are an Internal source of finance.

C) Gearing is beneficial to shareholders because interest payments to lenders are tax-deductible.

D) Gearing always includes loans that are at very high interest rates.

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