Explain the Leverage and the Incremental Cost of Debt with example?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Explain the Leverage and the Incremental Cost of Debt with example?
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Leverage – Leverage is a financial term it means using the debt for their financial needs and sometime the more leverage create liquidity risks because interest on debt would be payable annually without consideration of performance and net profit of the organization.
For example a business organization want to purchase a fixed assets they issue debt to finance their fixed assets.
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