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

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

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.
Next Post Previous Post
No Comment
Add Comment
comment url