Teaching UGC NET Mock Test Series 2025 (Paper 1 & 2) Business Finance Types of Financing Capital Market
Consider the following statements regarding financial leverage:
A. Financial leverage increases the company's fixed costs.
B. Financial leverage decreases the company's risk.
C. Financial leverage involves using debt to finance a portion of the company's assets.
D. Financial leverage has no impact on the company's profitability.
E. Investors use leverage to multiply their buying power in the market.
F. Misuse of leverage may have serious consequences, as there are some that believe it played a factor in the 2008 Global Financial Crisis.
Choose the correct answer from the options given below:
1
C, E, F only
2
D, E, F only
3
A, B, D only
4
B, C, D, E only