--%>
Assignment Help - homework help

Describe financial leverage and low operating leverage

Describe briefly high financial leverage, low operating leverage?

E

Expert

Verified

Whenever financial leverage is high than fund is receives mainly through the preference shares, debts and debentures. This creates the base solid by keeping the operating leverage low on scale. The financial decision can be exploited as the management's disquiet can be earning per share that will favor the debt capital only. This will rise when the rate of interest on debentures is lower than rate of return in business. The decision is depended on earning per share devoid of any indication of the risks involved.

   Related Questions in Business Economics

  • Q : Comparative Advantage of free trade

    According to the advocates of free trade and World Trade Organization, each and every country potentially advantages from trade liberalization and the lowering of tariffs since each and every country: (1) Has a comparative benefit in something. (2) Ga

    		•
  • Q : Assertion to increase in the minimum

    Use the circular flow model to confirm this assertion for a $1 per hour increase in the minimum wage?

    		•
  • Q : Introduction of the term Financial

    Give a brief introduction of the term Financial Leverage?

    		•
  • Q : Define the term Weak-form market

    Define the term Weak-form market efficiency. Explain briefly.

    		•
  • Q : Laissez-faire philosophy of government

    As per to the laissez-faire philosophy of government,: (1) economy works best while all investment decisions are centralized. (2) market system works best along with only minimal government intervention. (3) government must be restricted to stabilizin

    		•
  • Q : Determine the relative cost of a product

    If banana divides are $2, CD disks are $10, and SCUBA vacations are $360, then what is the relative cost of a SCUBA vacation in phrases of a CD disk: (i) 36 disks. (ii) 360 disks. (iii) 180 disks. (iv) 20 disks. (v) 3,600 disks.

    Q : Decreases in opportunity costs of

    The opportunity costs of production and consumption for most resources and goods tend to be decreased by: (w) private monopoly power. (x) price floors. (y) intense competition. (z) price ceilings. Hey friends pleas

    		•
  • Q : When are transaction costs to ultimate

    Transaction costs to ultimate consumers are reduced if: (w) consumers travel long distances to buy directly from manufacturers quite than buying the goods at local retail stores. (x) intermediaries generate income while conveying goods from manufactur

    		•
  • Q : What do you mean by Financial Linkages

    What do you mean by Financial Linkages in U.S. and World Trade?

    		•
  • Q : National currencies of foreign exchange

    Elucidate various national currencies of foreign exchange market?

    		•