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True for False: The use of financial leverage magnifies the effects of gains and losses to net income (and stockholders). This means a firm has

True for False: The use of financial leverage magnifies the effects of gains and losses to net income (and stockholders). This means a firm has higher financial risk. Although people often associate "risk" with being "bad", and a company will indeed have greater losses in bad times, higher financial leverage can also result in greater profits in good times. Therefore, despite the association of "risk" with being "bad", sometimes employing financial leverage can be wise, and the optimal amount of debt is not necessarily zero

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