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Leverage

Definition: The use of debt capital to finance a business. The more borrowed funds used, the higher the leverage. Leverage implies the ability to use a smaller amount of equity and a larger portion of debt in a Definition: business. Definition: [crh] The use of debt financing, or property of rising or falling at a proportionally greater amount than comparable investments. For example, aDefinition: n option is said to have high leverage compared to the underlying stock because a given price change in the stock may Definition: result in a greater increase or decrease in the value of the option. Also, commonly known as Gearing in Europe.

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