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As the financial leverage increases, the breakeven point of the company increases. The company now has to sell more of its product (or service) in order to break even.
As the financial leverage increases, the risk to banks and other lenders increases because of the higher probability of bankruptcy.
As the financial leverage increases, the risk to stockholders increases because greater losses may be incurred if the company goes bankrupt.
As the financial leverage increases, the risk to stockholders increases because the higher leverage will cause greater volatility in earnings and greater volatility in the stock price.
What else can I help you with?
What is the best way in SPSS to find out the strength of the relationship between the financial trends of a bank and the industry using financial statement items?
The best way in SPSS to find out the strength of the relationship between the financial trends of a bank and the industry using financial statement items is to use the determinants of Bank Profitability.
What is the relationship between financial decision making and risk and return?
plz quote me the answer of the above question
What is financial performance analysis?
Financial performance analysis is the method of correctly establishing the relationship between the profit and loss account and the things on the balance sheet. The information is used to identify the financial weaknesses and strengths of a firm.
What does the starting level of sales determine the degree of operating leverage rather than the ending level of sales?
The starting level of sales is crucial in determining the degree of operating leverage because it reflects the fixed and variable cost structure at that specific point in time. Operating leverage measures how changes in sales volume affect operating income, and it is most relevant when sales are analyzed from their initial level. If sales increase from a low starting point, the impact of fixed costs on profitability is magnified, leading to higher operating leverage. Conversely, the ending level of sales may not accurately represent the cost behavior or the relationship between sales and profits established at the beginning.
What is the relationship between profit margins and growth capacity?
What is the relationship between profit margins and growth capacity?
Difference between operating leverage and financial leverage?
operating leverage is related to the investiment which is runing the business as finacial leverage related to the total equity minus laibalities .
Relationship between taxation pollution and financial statement?
relationship between pollution ,taxation and financial statement
What is the relationship between financial services and overall financial planning?
GEHY!!!!!!!!!!!!!!!!
Explain relationship between financial and non-financial performance indicators in achieving corporate governance compliance?
relationship between financial and non-financial performance indicators in achieving corporate governance compliance.
What is the difference between Leverage and Unlevering?
In finance, leverage is a general term for any technique to multiply gains and losses. The unlevered beta is the beta of a company without any debt. Unlevering a beta removes the financial effects from leverage.
What is the relationship between financial accounting and Statistics?
what is the relationships between statistics and accounting
What is the relationship between insurance and successful financial management?
money
What is the relationship between price and yield in financial markets?
In financial markets, there is an inverse relationship between price and yield. When the price of a financial asset goes up, its yield goes down, and vice versa. This relationship is important for investors to consider when making decisions about buying or selling securities.
If doubling the manipulating variable results in a doubling of the responding variable the relationship between the variables is a?
This would indicate that there is a linear relationship between manipulating and responding variables.
What is the best way in SPSS to find out the strength of the relationship between the financial trends of a bank and the industry using financial statement items?
The best way in SPSS to find out the strength of the relationship between the financial trends of a bank and the industry using financial statement items is to use the determinants of Bank Profitability.
What is financial gearing?
It is the relationship between shareholders equity and fixed interest debt.
What is the relationship between insurance and successful financial management Why is insurance important?
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