Examveda
Examveda

Financial leverage is also known as.

A. Trading on equity

B. Trading on debt

C. Interest on equity

D. Interest on debt

Answer: Option A

Solution(By Examveda Team)

Financial leverage is also known as Trading on equity. It is the balance between the cost financing operations with equity or debt and the income earned from the operations. In other words, it's a gamble.

This Question Belongs to Commerce >> Financial Management

Join The Discussion

Comments ( 1 )

  1. Mudassar Hussain
    Mudassar Hussain :
    4 months ago

    The correct answer is trading on debt. Financial levarage is proportion debt in capital structure. Firm is said to be levered if its capital structure contains debt.

Related Questions on Financial Management

Investment is the _______________.

A. net additions made to the nation’s capital stocks

B. person’s commitment to buy a flat or house

C. employment of funds on assets to earn returns

D. employment of funds on goods and services that are used in production process