Which of the following is correct in case financial leverage is considered by a firm ?

CS Executive · Financial and Strategic Management · PYQS · June 2024
Which of the following is correct in case financial leverage is considered by a firm ?
(A) The shareholders will be exposed to greater risk
(B) A firm will always have higher earnings per share than pre-financial leverage stage
(C) There will be no change in firm's taxes
(D) The earnings per share will remain constant even after adopting leverage

Answer & Explanation:

Correct Answer: Option (A)

Official answer key: (A).

Topics: Financial Management

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