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Which of the following terms refers to the use of debt financing?

Arslan Khalid

25 Jul, 2023

A. Operating Leverage
B. Financial Leverage
C. Manufacturing Leverage
D. None of the given options

Details:

Financial leverage is the use of debt to buy more assets. Leverage is employed to increase the return on equity. However, an excessive amount of financial leverage increases the risk of failure, since it becomes more difficult to repay debt.

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