By taking on more debt and increasing leverage, businesses can expand their asset base and boost their return on equity. Why is it undesirable to use leverage?

Group of answer choices

In times of market downturns, leverage can magnify losses.

It lowers output, which might affect return on equity negatively.

Cash$-$based gains are favored by analysts, whereas leverage$-$based profits are disregarded.

During high$-$growth business cycles, leverage can multiply profits.

Leverage is never a terrible concept because it can help a business grow.