Which of the following situations represents a successful use of financial leverage?
a. A firm issues new shares of stock and uses the proceeds from the sale to retire its outstanding debt.
b. A firm borrows money at 8% and earns an 11% return on its investment of these funds.
c. A firm attracts the interest of two venture capitalists, and plays one against the other to gain the best deal.
d. A retail firm purchases merchandise at $10 and sells it for $15.
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