Which of the following is not a source of financial leverage?
A) Bonds payable.
B) Accounts payable.
C) Preferred shares.
D) Retained earnings.

Question

Quizplus · Accepted Answer

Retained earnings are a source of internal financing and not financial leverage. Financial leverage refers to the use of debt or other fixed cost sources of financing to increase the potential return on investment. Bonds payable, accounts payable, and preferred shares are all examples of financial leverage.

Which of the Following Is Not a Source of Financial