How can an investor leverage itself more than the firm?
A) By borrowing money and investing it in stock along with the money with which they started
B) By buying the firm's bonds
C) By buying the firm's preferred stock
D) Investors cannot leverage themselves more than the firm.

Question

Quizplus · Accepted Answer

Investors can leverage themselves more than the firm by borrowing money and investing it in the stock along with their initial capital. This increases their exposure to the firm's performance beyond their own equity.

How Can an Investor Leverage Itself More Than the Firm