The
modern competitive business strategies cause subsequent increase in the ability
of firm, that depends on efficient use of leverage in the capital structure.
Leverage can be defined as long term debt financing that improves the permanent
financial performance as well as the success of the organization. It explainsthe use of borrowed funds for the investment and return on that investment. For
this reason the determination of the proportion of debt and equity is
considered as one of the most essential decisions that decide the future of the
organization.
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