Capital Structure Question:

Download Job Interview Questions and Answers PDF

What does high/ low financial leverage indicate?

Capital Structure Interview Question
Capital Structure Interview Question

Answer:

High financial leverage indicates the risky investment made by the company's shareholders. Low financial leverage indicates that management has adopted a very good approach towards the debt capital. This decreases the management decision making on earning per share.

Download Capital Structure Interview Questions And Answers PDF

Previous QuestionNext Question
Explain Financial Leverage. How is it calculated? What does high/ low financial leverage indicate?What does financial leverage indicate? What are its limitations?