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Favorable leverage occurs when the interest rate on debt financing is less than the rate of return earned by the firm. dividend rate on a

Favorable leverage occurs when the

interest rate on debt financing is less than the rate of return earned by the firm.

dividend rate on a stock is less than the interest rate a on bond.

interest rate on debt financing is less than the dividend yield on a stock.

rate of return earned by the firm is less than the interest rate on its debt financing.

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