Multiple Choice
Boylston Inc.'s total interest bearing debt is $10,000,000 on which it pays interest at the rate of 5%. Boylston's rate of return on assets is 10%. How much cash flow does leverage add to shareholders equity?
A) $(500,000) negative cash flow
B) $(1,000,000) negative cash flow.
C) $1,000,000
D) $500,000
Correct Answer:
Verified
Correct Answer:
Verified
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