ValeriaVironche1920 ValeriaVironche1920
  • 09-03-2020
  • Business
contestada

________ is the potential use of fixed financial charges to magnify the effects of changes in earnings before interest and taxes on a firm's net income and earnings per share.

Respuesta :

segehood
segehood segehood
  • 14-03-2020

Answer:

A. Financial leverage

Explanation:

Financial leverage is simply the use of debt to buy more assets. It is defined as the degree to which a firm uses limited funds obtained at fixed cost with the aim of increasing returns to common shareholders. Financial leverage shows the use of debt and preferential share capital for magnifying the profit available to equity shareholders. In summary, it is the use of funds obtained at fixed cost to magnify the returns of the equity shareholders.

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