--%>

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 : Utility with food coupons Question: In

    Question: In Vancouver the Salvation Army encourages people to make food voucher donations to panhandlers instead of simply giving them cash. You can buy a food voucher for $5 and give it to a panhandler who can use it to purchase food. The Sa

  • Q : Entrepreneurs and business are at the

    Explain the statements: Entrepreneurs and business are at the helm of the economy.

  • Q : Illustrate Rational Behaviour of

    Illustrate Rational Behaviour of Economic Perspective?

  • Q : Subjective aspects of pricing- economic

    Adam Smith must have emphasized more strongly how his Wealth of Nations drew concepts and inspiration by Richard Cantillon’s Essai. Now today’s perspective that the Wealth of Nations would considered even

  • Q : Describe four important areas to

    Describe four important areas to emphasize Expenditures?

  • Q : Resource markets in simple circular

    Can someone help me in finding out the right answer from the given options. In resource markets in a simple circular flow model, house-holds exchange their _________ for _________. (1) Resources | income. (2) Goods | profits. (3) Labor | goods. (4) Devotion | enlighte

  • Q : Way to determine nature price of Adam

    “Natural price” by Adam Smith of a good was eventually determined through: (1) the amount of capital used within production in the short run. (2) long-run average costs of production, that Adam Smith believed to be the amo

  • Q : Several determinants of demand besides

    Illustrate the several determinants of demand besides price which affect demand?

  • 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

  • Q : Describe unequal burdens of

    Describe unequal burdens of unemployment exist?