--%>
Assignment Help - homework help

Introduction of the term Financial Leverage

Give a brief introduction of the term Financial Leverage?

E

Expert

Verified

It is a leverage that refers to high level of profitability due to high fixed financial expenditures. It consists of preference dividend and interest on loan. Higher financial leverage points out higher financial risk and higher break points. In this category the managers have flexibility in the choice of capital structure.

   Related Questions in Business Economics

  • Q : Enterprise is dictated primarily by

    “The legal form an enterprise assumes is dictated primarily by the financial requirements of its particular line of production.”  Do you agree?

    		•
  • Q : What are the Causes and theories of

    What are the Causes and theories of inflation?

    		•
  • Q : Illustrate the advantage and

    Illustrate the advantage and disadvantage of Partnership?

    		•
  • Q : How can we calculate EPS How can we

    How can we calculate EPS?

    		•
  • Q : Advantage in production of two products

    Explain by giving example of an absolute advantage in production of two products?

    		•
  • Q : An Inquiry in the Nature and Causes The

    The first comprehensive work upon economics written within English was authored through Adam Smith in 1776 year and entitled that “An Inquiry within the Nature and Causes of: (1) Laws of Supply and Demand.” (2) Wealth of Nations.” (3

    		•
  • Q : What is the opportunity cost of your

    Suppose you arrive at a store expecting to pay $100 for an item, but learn that a store two miles away is charging $50 for it.  Would you drive there and buy it?  How does your decision benefit you?  What is the opportunity cost of your decision?  Now suppose you arrive at a s

    		•
  • Q : Risky forms of production to gain

    Entrepreneurs: (w) undertake risky forms of production to gain uncertain profits. (x) obtain interest payments for their services. (y) are usually overcompensated for their innovations. (z) receive virtually all their wealth by inheritance.

  • Q : Ambrose’s budget constraint Question:

    Question: Ambrose consumes two goods, peanuts (x1 ) and a composite good (x2). He has a utility functionU = 4 √x1 + x2. This means his MU1 = 2/ √x1 an

    		•
  • Q : Rightward shift of PPC What was

    What was rightward shift of PPC point out? Answer: It points out growth of the resources.

    		•