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Financial Leverage Is Negative in Which of the Following Situations

Question 1

Multiple Choice

Financial leverage is negative in which of the following situations?


A) When the return on total assets is less than the rate of return on common shareholders' equity.
B) When total liabilities are less than shareholders' equity.
C) When total liabilities are less than total assets.
D) When the return on total assets is less than the rate of return demanded by creditors.

Correct Answer:

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