Financial leverage is the use of borrowed funds to increase the return on owners' equity.

Name: Financial leverage is the use of borrowed funds to increase the return on owners' equity.
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Financial leverage allows a company to use borrowed funds to invest in assets that generate a higher return than the cost of the borrowed funds, thus increasing the return on owners' equity. However, it also increases the risk and potential losses for the owners if the investment does not perform as expected.

Financial Leverage Is the Use of Borrowed Funds to Increase