Borrowing that allows a company to purchase more assets than its stockholders are able to pay for is

Question

Quizplus · Accepted Answer

Leverage refers to the use of borrowed funds (such as loans or bonds) to finance the purchase of assets. By doing so, a company can increase its potential profits (if the return on the assets is greater than the cost of borrowing) and enhance its financial position. This is often used to help a company grow more quickly than it could if it relied solely on its own equity financing (i.e., funding from stockholders).

Borrowing That Allows a Company to Purchase More Assets Than