--%>

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 : Market Apparent program For the

    For the question below, utilize the given information. The market for gizmos is competitive, with an increasing sloping supply curve and a downward sloping demand curve. With no govt. intervention, the equilibrium price is $25 and the equilibrium quantity is 10,000 gi

  • Q : Comparative advantage in production I

    I have a problem in economics on Comparative advantage in production. Please help me in the following question. The oranges are grown in Florida and potatoes are grown in Maine mainly since: (i) orange-grower’s in Maine have not lobbied effectiv

  • Q : Explain the term Earnings per share

    Briefly explain the term Earnings per share (or EPS)?

  • Q : Main advantage of EVA The main

    The main advantage of using EVA is that it is simple to calculate and understand. It uses simple measures like operating profits and cost of capital terms which are widely known and accepted in the financial arena. It helps the managers to assess thei

  • 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 : Distinguish between allocative

    Distinguish between allocative efficiency and productive efficiency. Give an illustration of achieving productive, but not allocative, efficiency?

  • Q : Write short note on Markets Write short

    Write short note on Markets?

  • Q : Exchange is the necessary consequence

    Explain: “Exchange is the necessary consequence of specialization.”

  • Q : What are the 2 definitions of economics

    What are the 2 definitions of economics growth?

  • Q : Economic sense production methods

    Evaluate and explain the statements: “In the economic sense production methods are the most efficient methods, once resource prices are considered and are lesser in sense of engineering”.