A levered firm is one that has ________ outstanding.

Question

Quizplus · Accepted Answer

A levered firm has issued debt, which means it has borrowed money and has to pay interest and principal payments on that debt. This creates financial leverage, which can amplify returns for shareholders when the company is doing well, but also increases risk for shareholders when the company is not performing as anticipated. Equity, preferred stock, and equity options are all forms of ownership in the company, but do not necessarily indicate whether the company has leverage or not.

A Levered Firm Is One That Has ________ Outstanding