A friend is studying for an accounting exam and exclaims, “I’m really confused by all this leverage stuff. What is leverage, anyway? How does it affect a company? And what has it got to do with the debt-to-equity ratio or debt-to-assets ratio? The professor keeps saying that a company with a low debt-to-equity ratio might want to increase its leverage. What’s she talking about, anyway?” Write an explanation of these issues that your friend can use to study for his exam.