Provide An Example Of A Situation Where A Company Would Want To Use Leverage. What Might The Company Do To Achieve That Leverage?


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Cihan Barut Profile
Cihan Barut answered

First of all let us define Leverage.

When companies feel a potential loss or insufficient funds for near future, they will borrow some funds to compensate this potential bad outcome.

This could be either a direct bank loan or a debt from a allied company.

More simple, it is to borrow money to supply cash support where there is a deficit.

Kind regards,

Cihan Barut

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