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

(c) Debt is easily available

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

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Solution

Financial leverage is called favourable if RoI is higher than the cost of debt.

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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 the amount of total debt in the capital. It is calculated as:

Financial leverage is a proportion of debt in an overall capital. State whether true or false.

Financial leverage is called favourable if

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