Post Utme Covenant University 2025 Commerce Question 39

Practice objective / multiple choice question 39 from the 2025 Post Utme Covenant University Commerce examination.

Post Utme Covenant University 2025 Commerce Objective / Multiple Choice
Question 39 POST_UTME_COVENANT_UNIVERSITY • 2025 • COMMERCE • objective

A firm's financial leverage is the use of debt financing to increase its return on equity. Which of the following is a correct example of financial leverage?

Answer Options

A. ( ext{Financial leverage} = rac{ ext{Total assets}}{ ext{Total debt}} )
B. ( ext{Financial leverage} = rac{ ext{Total equity}}{ ext{Total assets}} )
Correct Answer C. ( ext{Financial leverage} = rac{ ext{Total debt}}{ ext{Total equity}} )
D. ( ext{Financial leverage} = rac{ ext{Total assets}}{ ext{Total equity} + ext{Total debt}} )
Correct Answer
C
Correct Option:
( ext{Financial leverage} = rac{ ext{Total debt}}{ ext{Total equity}} )

About This Question

This is Post Utme Covenant University 2025 Commerce Question 39. It is one of the objective questions from the 2025 Post Utme Covenant University Commerce examination.

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