Finance
Textbooks
Boundless Finance
Capital Structure
Finance Textbooks Boundless Finance Capital Structure
Finance Textbooks Boundless Finance
Finance Textbooks
Finance

Section 5

Thinking About Financial Leverage

Book Version 3
By Boundless
Boundless Finance
Finance
by Boundless
View the full table of contents
4 concepts
Thumbnail
Defining Financial Leverage

Financial leverage is a tactic to multiply gains and losses, calculated by a debt-to-equity ratio.

Thumbnail
Impacts of Financial Leverage

The use of financial leverage can positively - or negatively - impact a company's return on equity as a consequence of the increased level of risk.

Thumbnail
Leverage Models

Models that allow us to interpret appropriate financial leverage include the Modigliani-Miller theorem and the Degree of Financial Leverage.

Thumbnail
Combining Operating Leverage and Financial Leverage

To calculate total leverage, we multiply Degree of Operating Leverage by Degree of Financial Leverage.

Subjects
  • Accounting
  • Algebra
  • Art History
  • Biology
  • Business
  • Calculus
  • Chemistry
  • Communications
  • Economics
  • Finance
  • Management
  • Marketing
  • Microbiology
  • Physics
  • Physiology
  • Political Science
  • Psychology
  • Sociology
  • Statistics
  • U.S. History
  • World History
  • Writing

Except where noted, content and user contributions on this site are licensed under CC BY-SA 4.0 with attribution required.