--%>

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 : Best society according to Utilitarianism

    Utilitarianism proposes such that the finest society is one which gives the: (w) fundamental goods to meet people’s requirements. (x) greatest happiness for the maximum number of people. (y) exact measurement of utility and disutility. (d) highe

  • Q : Surpluses in the balance of trade The

    The advocates of laissez-faire policies favor: (i) Govt. control of economy. (ii) Public ownership of all the resources. (iii) Income to be distributed according to requirement. (iv) Surpluses in the balance of trade. (v) Minimal govt. intervention in economy.

  • Q : Theories of capital structure Write

    Write down the theories of capital structure?

  • Q : Analysis of US GDP and GDP growth rate

    You may use a calculator and MINITAB to conduct the necessary calculations for all questions.  Analysis of US GDP and GDP growth rate (1959-2004). The following variables can be retrieved from MIN

  • Q : Briefly state the pros and cons of

    Briefly state the pros and cons of Corporation?

  • Q : Increase in the American dollar price

    “An increase in the American dollar price of the South Korean won implies that the South Korean won has depreciated in value.”  Explain.

  • 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 : 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”.

  • Q : Explain the Trade pattern of U.S. and

    Explain the Trade pattern of U.S. and World Trade?

  • Q : Reduce price differences by arbitrage

    When government intervention is not present, than arbitrage: (w) will reduce price differences when similar good sells at various prices within separate markets. (x) results into economic losses for traders. (y) causes high economic profits for mercha