--%>

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 : Major type of expenditure at the state

    What is the most important source of revenue and the major type of expenditure at the state level?  

  • Q : Rightward shift of PPC What was

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

  • 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 : Describe unequal burdens of

    Describe unequal burdens of unemployment exist?

  • Q : Firm costs and revenues Question:  You

    Question:  You are given the following data about two firms: FIRM A Quantity 0

  • Q : Historical process by Adam Smith of

    Writings on the historical process by Adam Smith of economic development do not comprise heavy reliance upon: (1) the development of property rights. (2) self interest. (3) divisions of labor in production processes. (4) innovations d

  • Q : Describe the Slope of a nonlinear curve

    Describe the Slope of a nonlinear curve?

  • Q : Exchange and Specialization I have a

    I have a problem in economics on Exchange and Specialization. Please help me in getting the right answer from the following question. Sarah the wheat farmer would be most probable to trade for fruit from the Kathy's orchard if: (i) Sarah's opportunity

  • Q : Market system is a profit-and-loss

    Evaluate and explain the statements: “The market system is a profit-and-loss economy”

  • Q : Exploit consumers in highly competitive

    This is difficult for firms within highly competitive markets to exploit consumers since: (i) consumer advocates organize boycotts that generate bad publicity. (ii) market pressures force fair distributions of products. (iii) the government sets price