If a company must pay more for the amounts provided by creditors and preferred stockholders than it can earn overall,as indicated by the return on assets,there will be favorable leverage.

Question

Quizplus · Accepted Answer

If the company must pay more to creditors and preferred stockholders than it can earn overall, it will result in unfavorable leverage as the company's profitability will be negatively affected.

If a Company Must Pay More for the Amounts Provided