Financial leverage is the amount of total debt in the capital. It is calculated as:

Debt equity ratio = Debt/Equity

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Proportion of debt in the total capital = Debt/Debt+Equity

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Both A and B

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None of these

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Solution

The correct option is C
Both A and B

Financial leverage is the amount of total debt in the capital. It is calculated as:

Debt equity ratio = Debt/Equity

Proportion of debt in the total capital = Debt/Debt+Equity

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Financial leverage is a proportion of debt in an overall capital. State whether true or false.

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