Question: Negative financial leverage occurs when the a)average net (after tax) interest rate on borrowed funds is less than the company's earnings rate on its assets.

Negative financial leverage occurs when the a)average net (after tax) interest rate on borrowed funds is less than the company's earnings rate on its assets. b)return on assets is more than return on equity. c)return on equity is more than return on assets. d)operating expenses exceed gross margin.

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!