The use of Personal borrowing to alter the degree of financial leverage is called__________?
Correct answer: D. Homemade leverage
- A. None of the given optionHire An Accountant
- B. Financial leverage
- C. Operating leverage
- D. Homemade leverage
Explanation
Homemade leverage occurs when an individual borrows personally to change the effective leverage of an investment. It allows the investor to create leverage independently of the firm's capital structure.
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