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A firm will have favourable leverage if its are more than...

This question belongs to Commerce Financial Management
Financial Management
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A firm will have favourable leverage if its _____ are more than the debt cost

Answer & Solution
Correct Answer: Option D
A firm will have favourable leverage if its earnings are more than the debt cost. Financial leverage is favorable when the uses to which debt can be put generate returns greater than the interest expense associated with the debt.
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