- CFA Exams
- 2024 Level I
- Topic 6. Equity Investments
- Learning Module 5. Company Analysis: Past and Present
- Subject 5. Capital Investments and Capital Structure
Seeing is believing!
Before you order, simply sign up for a free user account and in seconds you'll be experiencing the best in CFA exam preparation.
Subject 5. Capital Investments and Capital Structure PDF Download
The degree of financial leverage measures the sensitivity of net income to changes in operating income. Financial leverage is primarily driven by the issuer's capital structure.
Unlike operating leverage, the degree of financial leverage is most often a choice by the company's management. Companies with a higher ratio of tangible assets to total assets may have higher degrees of financial leverage because lenders may feel more secure that their claims would be satisfied in the event of a downturn.
User Contributed Comments 0
You need to log in first to add your comment.
I am happy to say that I passed! Your study notes certainly helped prepare me for what was the most difficult exam I had ever taken.
Andrea Schildbach
My Own Flashcard
No flashcard found. Add a private flashcard for the subject.
Add