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Financial leverage a. reduces the odds that a firm will encounter financial distress. b. when overextended greatly magnifies the possibility that a firm will become
Financial leverage
a. | reduces the odds that a firm will encounter financial distress. | |
b. | when overextended greatly magnifies the possibility that a firm will become bankrupt. | |
c. | when used in moderation tends to lower the potential rewards to stockholders. | |
d. | allows a firm to greatly increase its assets without increasing its debt. | |
e. | refers to the issuance of company stock to finance a new business venture.
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