Which one of the following statements concerning financial leverage is correct?

G

George

New member
a. The benefits of leverage are unaffected by the amount of a firm's earnings.
b. The use of leverage will always increase a firm's earnings per share.
c. The shareholders of a firm are exposed to greater risk anytime a firm uses financial leverage.
d. Earnings per share are unaffected by changes in a firm's debt-equity ratio.
e. Financial leverage is beneficial to a firm only when the firm has minimal earnings.
 
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