Find the best answers to your questions at Westonci.ca, where experts and enthusiasts provide accurate, reliable information. Get immediate and reliable answers to your questions from a community of experienced professionals on our platform. Experience the convenience of finding accurate answers to your questions from knowledgeable experts on our platform.
Sagot :
The leverage of $1.77 means that $1.91 of assets is funded with $1 of equity and $.77 of debt.
What is leverage?
Leverage examines the financial structure of the company. Assets of the business were purchased using debt or equity. Leverage looks at the proportions. The more the Debt is, there is the higher the risk of bankruptcy. The more Equity, the higher the risk of take-over, at least for publicly held companies. Leverage definitions vary. Debt/Assets, Debt/Equity, and Assets/Equity are the three that are used the most frequently.
A leverage of 1.0 means no debt - every $1 of assets was paid for with $ 1of equity. Leverage of 2.0 means $ 2 of assets for every $ 1 of equity. 3.0 means $ 3 of assets for every $ 1 of equity, and therefore that the remaining $ 2 came from debt.
Therefore, the leverage of $1.77 means that $1.91 of assets is funded with $1 of equity and $.77 of debt.
Learn more about leverage at: https://brainly.com/question/27972889
#SPJ4
We hope our answers were useful. Return anytime for more information and answers to any other questions you have. Thank you for visiting. Our goal is to provide the most accurate answers for all your informational needs. Come back soon. Thank you for using Westonci.ca. Come back for more in-depth answers to all your queries.
