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1 year ago

The more ________ used, the greater the leverage a company employs on behalf of its owners.

Business

1 answer:

son4ous [18]1 year ago

8 0

The more debt used, the greater the leverage a company employs on behalf of its owners.

<h3>What is financial leverage?</h3>

Financial leverage exists as the usage of borrowed money (debt) to finance the purchase of assets with the anticipation that the income or capital gain from the new asset will surpass the cost of borrowing.

<h3>What is financial leverage example?</h3>

An example of financial leverage use contains utilizing debt to buy a house, borrowing money from the bank to begin a store, and bonds issued by companies.

Debt exists as an obligation that requires one party, the debtor, to pay money or other agreed-upon value to another group, the creditor. Debt stands for deferred payment, or sequence of payments, which distinguishes it from an immediate purchase.

To learn more about financial leverage refer to:

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True or false: The many legal barriers in place around the world makes it difficult to buy securities from foreign companies.

Margarita [4]

Answer:

false

Explanation:

thanks to expanded communications and the relaxation of many legal barriers, investors can buy securities from companies anywhere in the world.

6 0

1 year ago

The numerator of the return on common stockholders' equity is_____________. a.income before income tax b.operating income minus

elena-s [515]

The numerator of the return on common stockholders' equity is net income minus preferred dividends.

Option d

<u>Explanation:</u>

Return on common stockholders' equity which is also named as return on equity (ROE) ratio evaluates the accomplishment of a company in resulting income for the benefit of common stakeholders.

<em>Use of return on equity:</em>

Isolates common equity returns
Can be used to evaluate dividends
Evaluates the use of capital by the management

It is calculated by income available for stockholders divided by the total number of common stock and is expressed or represented in percentage. Income available for common stockholders can be arrived by reducing preference dividends from Net income.

That is, $\text { Net income }-\text { Preference dividends }=\text { Equity available for common stockholder }$

Hence, net income minus preferred dividends is the right answer.

3 0

3 years ago

MC algo 3-13 Equity Multuiplier Use the following information to answer this question Windswept, Inc. 2017 Income Statement ($ i

Helga [31]

Answer:

The answer is Option D. 1.68 times

Explanation:

The formula for equity multiplier is:

Equity Multiplier = Total assets ÷ Total stockholder's equity

In 2017:

Total stockholder's equity = Common stock + Retained earnings

Total stockholder's equity = $2890 + $700 = $3590

Total assets = $6,015

Now, putting these values in the above formula, we get,

Equity multiplier = $6,015 ÷ $3,590 = 1.68 times

5 0

3 years ago

Melanie has a balance of $1700 on a credit card with an apr of 24.2%, compounded monthly. about how much will she save in intere

slamgirl [31]

She will save about $267.27 ($2160.24 - $1892.97) in interest over the course of a year if she transfers her balance to a credit card with an apr of 10.8%, compounded monthly. This problem can be solved using the compounding interest formula which stated as A = P*(1+i)^n. A is the amount affected by the compounding interest, i is the interest rate, and n is the period of time. You must find the amount using the 24.2% and 10.8% compounding interest and find the difference between them.

4 0

3 years ago

Read 2 more answers

Describe the two primary functions of financial accounting

andreev551 [17]

Answer: Measurement and presentation of financial performance

Explanation: The two primary functions of financial accounting are measurement and presentation of financial performance.

The measurement function is performed by following accounting procedures and policies under US GAAP and IFRS.

Whereas, presentation function relates to preparation of financial statements like income statement and cash flow statement.

6 0

3 years ago

The more​ ________ used, the greater the leverage a company employs on behalf of its owners.

The more ________ used, the greater the leverage a company employs on behalf of its owners.