Asked by Alondra Gonzalez on May 06, 2024
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Increasing leverage decreases management's flexibility in future financing decisions.
Leverage
The use of borrowed capital to increase the potential return of an investment, also referring to the ability to influence situations or people to achieve a particular outcome.
Management's Flexibility
The ability of a company's management to adapt to changes in the business environment, including altering strategies and operational processes.
Financing Decisions
Choices made by a company regarding the best methods to finance its operations or expansions, including equity, debt, or internal funds.
- Acquire knowledge on financial leverage and its influence on a firm's financial adaptability and the returns to shareholders.
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Learning Objectives
- Acquire knowledge on financial leverage and its influence on a firm's financial adaptability and the returns to shareholders.
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