If a company earns more with the money it borrows than it has to pay to borrow that money,it has positive financial leverage.

Name: If a company earns more with the money it borrows than it has to pay to borrow that money,it has positive financial leverage.
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Positive financial leverage is when a company earns a higher return on the investments made with borrowed funds than the cost of borrowing those funds. This results in an increase in the company's profitability and shareholder value.

If a Company Earns More with the Money It Borrows