Companies use different sources for financing their assets-internal resources as well as external resources, and debt (borrowed) as well as equity funds. Aunt Dottie's linen Inc. reported no long-term debt in its most recent: balance sheet. A company with no debt on its books is referred to as: A company with no leverage, or an unleveraged company A company with leverage, or a leveraged company Which of the following is true about the leveraging effect? Using leverage can generate shareholder wealth, but if a company fails to make payments on its debt, credit default can reduce shareholder wealth. Using leverage reduces the potential or gains and losses. The U.S. tax structure influences a firm's willingness to finance with debt. The tax structure discourages more debt