Q42
When a company uses debt fund in its financial structure, it will lead to a change in
A.
Financial leverage
AnswerB.
Operating leverage
C.
Money market leverage
D.
Stock market leverage
Answer: Option A
Solution
Answer: Option A
Solution:
When a company uses debt fund in its financial structure, it will lead to a change in Financial leverage. Financial leverage is the amount of debt that an entity uses to buy more assets. Leverage is employed to avoid using too much equity to fund operations.