leverage
Definition 1
The degree to which an investor or business is utilizing borrowed money. Companies that are highly leveraged may be at risk of bankruptcy if they are unable to make payments on their debt; they may also be unable to find new lenders in the future. Leverage is not always bad, however; it can increase the shareholders' return on their investment and often there are tax advantages associated with borrowing. also called financial leverage.
Definition 2
What the debt/equity ratio measures.
The degree to which an investor or business is utilizing borrowed money. Companies that are highly leveraged may be at risk of bankruptcy if they are unable to make payments on their debt; they may also be unable to find new lenders in the future. Leverage is not always bad, however; it can increase the shareholders' return on their investment and often there are tax advantages associated with borrowing. also called financial leverage.
Definition 2
What the debt/equity ratio measures.
This content can be found on the following page:
leverage is ...
... part of the Lending & Credit subject.
... part of the Lending & Credit subject.
... #20 on our list of the most popular terms.
... an essential investing term.
Related Terms
gearing, asset/equity ratio, equity multiplier, equity swap, hedge fund, LEAPS, Long-Term Equity Anticipation Securities, margin account, option, option contract and
leverage appears in these other terms
leveraged lease, leveraged recapitalization, Leveraged Buyout, leveraged loan, leveraged investment company
leverage appears in the definitions of these other terms on BusinessDictionary.com
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