It is wise for a retailer to maintain the highest possible financial leverage as a means of maximizing return on net worth.

Question

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Maintaining a high financial leverage means that the retailer is taking on more debt, which increases their financial risk. In the event of a downturn or other financial difficulties, a highly leveraged retailer may struggle to meet their debt obligations and could potentially face bankruptcy. Therefore, it is not always wise for a retailer to maintain the highest possible financial leverage as a means of maximizing return on net worth.

It Is Wise for a Retailer to Maintain the Highest