[Answer] Under what condition could the overuse of financial leverage be detrimental to the firm?

Answer: When there is a cyclical demand for the firm's products.

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Under what condition could the overuse of financial leverage be detrimental to the firm? Under which of the following conditions could the overuse of financial leverage be detrimental to the firm ? Cyclical demand for the firm s products. Firm A produces semiconductors using highly technical machinery. Under what condition could the overuse of financial leverage be detrimental to the firm ? When there is a cyclical demand for the firm s products. A factory that relies on highly technical machinery may choose to reduce its overall leverage position by. utilizing a higher level of equity. Tue Jun 12 2012 · Under which of the following conditions could the overuse of financial leverage be detrimental to the firm ? A) Stable industry B) Cyclical demand for the firm ’s products. C) Upswing of business cycle. D) Low interest cost compared to return on assets Solution Yes it is possible for financial leverage to be zero. Whomever is wanting to control or buy/sell an asset would be required to put up the entire cost of the contract. Mon Nov 23 2009 · Under which of the following conditions could the overuse of financial leverage be detrimental to the firm ? Stable industry Cyclical demand for the firm s products. Upswing of business cycle. Low interest cost compared to return on assets Chapter 05 - Operating and Financial Leverage 88 Under which of th...

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