Financial Leverage Is Called Favourable If________

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Solution

The answer is Return on investment is higher than the cost of debt.

Financial leverage refers to the proportion of debt in overall capital.

Therefore, it is favourable when the return on investment (ROI) becomes higher than the cost of debt.

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Similar questions

Financial leverage is called favourable if

(a) Return on investment is lower than the cost of debt

(b) ROI is higher than the cost of debt

(d) If the degree of existing financial leverage is low

Financial leverage is called favourable if:

Financial leverage is called favourable if

(a) Return on investment is lower than the cost of debt

(b) Rol is higher than the cost of debt

(d) If the degree of existing financial leverage is low

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