When company is highly leveraged this means

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Reference no: EM131623680

1. When a company is “highly leveraged”, this means:

A) the company has excess cash balances

B) the only source of long-term funding that the company uses is common stock

C) the company has a high percentage of Long-Term Debt on its Balance Sheet

D) the company pays a high level of cash dividends to shareholders

2. Common Stock investors receive their return in two ways: the opportunity to participate in price appreciation and the potential to receive cash dividends.

A) True

B) False

3. Preferred stock is a hybrid security that has characteristics of both long-term debt and common stock.

A) True

B) False

Reference no: EM131623680

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