--%>

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 : Problem on productive contribution

    Suppositions underpinning simple production possibilities frontier models don’t comprise a need that: (i) Net resources are fixed. (ii) All resources are efficiently employed. (iii) Technology is steady. (iv) Resource owners are paid according t

  • Q : Unpredictable and frequent fluctuations

    Adam Smith attributed unpredictable and frequent fluctuations within profits to: (i) variations in the prices of the goods a firm or person produces and sells. (ii) the bad or good fortune of rivals. (iii) the good or bad fortune of customers. (iv) tr

  • Q : Government expenditures on goods and

    Explain Government expenditures on goods and services and transfer payments?

  • Q : Guideline for monetary policy using

    Question: In using the Taylor Rule as a guideline for monetary policy, what are the pros and cons of using forecasted values of inflation and output rather than observed values of these variables? Answer: <

  • Q : How do you account for the dominant

    How do you account for the dominant role of corporations in the U.S. economy?

  • Q : Tax revenues to reduce rate of inflation

    Explain how government might manipulate its expenditures and tax revenues to reduce rate of inflation?

  • Q : Society material wants are scarce

    Explain the foundation of economics where society’s material wants are scarce resources?

  • Q : Illustrate the 4th role is the

    Illustrate the 4th role is the reallocation of resources?

  • Q : Importance of rationally optimal

    Economic scarcity is pervasive, that makes choices essential. Therefore, rationally optimal decisions hinge upon tradeoffs which essentially reflect: (i) cooperation to minimize human greed. (ii) opportunity costs. (iii) competitive social behavior. (

  • Q : Case study plz find the attachment and

    plz find the attachment and dont compromise on quality,, no similarity n need to be done according to requierment...