Question: MCQ2. Identify the correct statement: A) Leverage increase return to shareholders when operating return on assets is greater than the cost of debt B) Leverage

MCQ2.

Identify the correct statement:

A) Leverage increase return to shareholders when operating return on assets is greater than the cost of debt

B) Leverage increase return to shareholders when return on equity is greater than the cost of debt

C) Two firms with identical assets and operations should have the same net income

D) Leverage always increase return to shareholders because interest on debt is tax deductible

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