Define financial leverage. As long as a firms rate of return on assets exceeds its after-tax cost

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Define financial leverage. As long as a firm’s rate of return on assets exceeds its after-tax cost of borrowing, why doesn’t the firm increase borrowing to as close to 100% of financing as it can?

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Financial Accounting an introduction to concepts, methods and uses

ISBN: 978-0324789003

13th Edition

Authors: Clyde P. Stickney, Roman L. Weil, Katherine Schipper, Jennifer Francis

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Question Posted: Dec 03, 2011 03:27 AM

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Define financial leverage. As long as a firms rate of return on assets exceeds its after-tax cost

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Financial leverage involves using debt capital that has a smaller aftertax ...View the full answer

Financial Accounting an introduction to concepts, methods and uses

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