Scribd Logo
Upload

Welcome to Scribd!

  • Leverage

    Uploaded by

    cheva silviu
    4 views1 page
    Leverage refers to using borrowed capital or debt to increase the potential return of an investment. It is measured by the amount of debt a firm uses to finance its assets, with highly leveraged firms having significantly more debt than equity. Leverage allows investors and businesses to amplify potential gains but also increases the risks, as highly leveraged entities may struggle to repay debts or find new lenders if unable to make payments.

    Original Description:

    Copyright

    © Attribution Non-Commercial (BY-NC)

    Available Formats

    DOC, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document
    Leverage refers to using borrowed capital or debt to increase the potential return of an investment. It is measured by the amount of debt a firm uses to finance its assets, with highly leveraged firms having significantly more debt than equity. Leverage allows investors and businesses to amplify potential gains but also increases the risks, as highly leveraged entities may struggle to repay debts or find new lenders if unable to make payments.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOC, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as doc, pdf, or txt
    4 views1 page

    Leverage

    Uploaded by

    cheva silviu
    Leverage refers to using borrowed capital or debt to increase the potential return of an investment. It is measured by the amount of debt a firm uses to finance its assets, with highly leveraged firms having significantly more debt than equity. Leverage allows investors and businesses to amplify potential gains but also increases the risks, as highly leveraged entities may struggle to repay debts or find new lenders if unable to make payments.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOC, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as doc, pdf, or txt
    of 1

    What Does Leverage Mean? 1.

    The use of various financial instruments or borrowed capital, such as margin, to increase the potential return of an investment. 2. The amount of debt used to finance a firm's assets. A firm with significantly more debt than equity is considered to be highly leveraged. Leverage is most commonly used in real estate transactions through the use of mortgages to purchase a home Read more: http://www.investopedia.com/terms/l/leverage.asp#ixzz1eqRROQeN 1. The degree to which an investor or business is utilizing borrowed money. Companies that are highly leveraged may be at risk of bankruptcy if they are unable to make payments on their debt; they may also be unable to find new lenders in the future. Leverage is not always bad, however; it can increase the shareholders' return on investment and often there are tax advantages associated with borrowing. also called financial leverage. 2. What the debt/equity ratio measures.

    http://www.thefreedictionary.com/leverage

    You might also like