Question

Financial leverage refers to which of the following?

A. The leverage a firm obtains from increasing production.
B. The difference between the rate of return earned on current assets and the rate of return earned on retained earnings.
C. Decreasing fixed costs per unit by increasing production.
D. The difference between the rate of return earned on assets (ROI) and the rate of return earned on stockholders' equity (ROE).
E. None of the above.

Answer 1

D. The difference between the rate of return earned on assets (ROI) and the rate of return earned on stockholders' equity (ROE)

Step-by-step explanation: