Question: In financial leverage, why not simply increase leverage as long as the firm is able to earn more on the employment of the funds thus

In financial leverage, why not simply increase leverage as long as the firm is able to earn more on the employment of the funds thus provided than they cost? Would not earnings per share increase?

Step by Step Solution

3.35 Rating (167 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock

While earnings per share will increase as long as the firm is able to earn more ... View full answer

blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Document Format (1 attachment)

Word file Icon

635-B-F-F-M (6710).docx

120 KBs Word File

Students Have Also Explored These Related Finance Questions!