Written with graceful simplicity, The Big Wave won the Childrenâs Book Award of the Child Study Association of America when it was first released. This ebook features an illustrated biography of Pearl S. Buck including rare images from the authorâs estate. Read on Scribd mobile: iPhone, iPad and Android.
Well, the âadvantageâ of increased financial leverage is a potentially higher return on equity. The disadvantage, on the other hand, is that the business is now riskier as it is financed with more debt (when revenue falls for unexpected reasons, there's now a whole lot of interest that still has to be paid).
Relationship Between Financial Leverage and Risk. Not to be confused with operating leverage, financial leverage involves the use of debt in the firmâs financial structure.Though it may be operationally defined and measured in a variety of ways, it essentially entails the use of debt to extend the earning power of funds committed by the firmâs shareholders.elationship Between Financial Leverage and Risk. Not to be confused with operating leverage, financial leverage involves the use of debt in the firmâs financial structure.