Homemade leverage is:
A)the incurrence of debt by a corporation in order to pay dividends to shareholders.
B)the exclusive use of debt to fund a corporate expansion project.
C)the borrowing or lending of money by individual shareholders as a means of adjusting their level of financial leverage.
D)best defined as an increase in a firm's debt-equity ratio.
E)the term used to describe the capital structure of a levered firm.

Question

Quizplus · Accepted Answer

Homemade leverage refers to the borrowing or lending of money by individual shareholders as a means of adjusting their level of financial leverage. This is different from traditional leverage where a company borrows money to fund its operations or expansion projects.

Homemade Leverage Is