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- Leverage refers to the use of borrowed capital to amplify potential returns or losses on an investment. There are three main types of leverage12:
- Financial leverage: Involves using debt to finance assets.
- Operating leverage: The difference between sales revenue and operating expenses.
- Combined leverage: A combination of financial and operating leverage.
Learn more:✕This summary was generated using AI based on multiple online sources. To view the original source information, use the "Learn more" links.Leverage refers to the use of borrowed capital to amplify potential returns or losses on an investment, and it comes with advantages and risks. There are three main types of leverage companies can use: financial leverage, operating leverage, and combined leverage.capital.com/leverage-definitionLeverage works through a combination of borrowing and investing, where borrowing refers to obtaining funds from outside sources like a bank, while investments refer to using own funds for purchasing assets such as stocks, bonds, and property. Types of Leverage There are three main types of leverage: financial, operating, and combined.www.equiruswealth.com/glossary/leverage - People also ask
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