--%>

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 : How can we evaluate cost of capital How

    How can we evaluate cost of capital?

  • Q : Illustrate the rate of exchange of two

    Illustrate the rate of exchange of two products?

  • Q : Human Resource Management problems

    Question Write a report on a local firm that faces Human Resource Management problems. Pick two major problems and provide solutions to it. The company selected must

  • Q : Meaning of invisible hand according to

    Adam Smith’s opinion of an “invisible hand” powerfully implies the meaning that: (w) pursuit of individual self interest must be controlled. (x) most people lose sight of what’s good for society. (y) most peopl

  • Q : Competitive market economy will make

    Briefly explain how the competitive market economy will make the needed adjustments to reestablish an efficient allocation of society’s scarce resources?

  • Q : Illustrate and clarify the economizing

    Illustrate and clarify the economizing problem?

  • Q : Public policies for low-income Fuel

    Fuel stamp programs which subsidize heating oil purchases through low-income households encourage those families to: (w) create more income by working. (x) particularly conserve on their use of fuel. (y) live along with less purchasing power. (z) subs

  • Q : Demand supply Newspaper item: “Due to

    Newspaper item: “Due to lower grain prices, consumers can expect retail prices of choice beef to begin dropping slightly this spring with pork becoming cheaper after midsummer,” the Agriculture Department predicted. “This reflects increasing supply,” the department said. Does the statement use th

  • Q : Real exchange rate Question: To

    Question: To determine the real exchange rate, what two pieces of information do you need in addition to the nominal exchange rate? Answer:

    Q : Illustrate how Microeconomics looks at

    Illustrate how Microeconomics looks at specific economic units?