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  3. 2. debt (or leverage) management ratios companies

2. Debt (or leverage) management ratios Companies have the opportunity to use varying amounts of...

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Accounting

2. Debt (or leverage) management ratios Companies have the opportunity to use varying amounts of different sources of financing, including internal and external sources, to acquire their assets, debt (borrowed) funds, and equity funds. Which of the following is considered a financially leveraged firm? A company that uses only equity to finance its assets A company that uses debt to finance some of its assets Which of the following is true about the leveraging effect? Using leverage reduces a firms potential for gains and losses. Using leverage can generate shareholder wealth, but if a company fails to make the interest and principal payments on its debt, credit default can reduce shareholder wealth. Blue Sky Drone Company has a

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