Business Studies, asked by Shirin1780, 1 year ago

two reasons why financial leverage improves the rate of returns

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Answered by fidafathi
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Return on equity is the rate of return on the shareholders ' equity of a company's common stock owners. ... At an ideal level offinancial leverage, a company'sreturn on equity increases becausethe use of leverage increasesstock volatility, increasing its level of risk which in turn increases returns.
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