A management that wanted to increase the financial leverage of its firm would: raise additional capital by selling fixed interest rate long-term bonds. raise additional capital by selling common stock. use excess cash to purchase preferred stock for the treasury. try to increase its ROI by increasing asset turnover.

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Business

Saniya Knapp

13 March, 11:58

A management that wanted to increase the financial leverage of its firm would: raise additional capital by selling fixed interest rate long-term bonds. raise additional capital by selling common stock. use excess cash to purchase preferred stock for the treasury. try to increase its ROI by increasing asset turnover.

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Answers (1)

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Azaria Russo · Answer 1

Answer: Raise additional capital by selling fixed Interest rate long term bonds

Explanation:

A firm can finance it's operations through equity or debts, the art of a firm financing it's operations through debts like bonds etc it's refered to as financial leverage.

A firm cannot increase it's financial leverage by selling common stock, neither through buying stock from his cash and financial leverage does relate with asset turnover.