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Homework answers / question archive / Financial leverage increases return on equity because the: (a) cost of debt is lower than the cost of equity

Financial leverage increases return on equity because the: (a) cost of debt is lower than the cost of equity

Accounting

Financial leverage increases return on equity because the:

(a) cost of debt is lower than the cost of equity.

(b) cost of equity is lower than the cost of debt.

(c) interest expense lowers the profit.

(d) interest rate is lower than the tax rate

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