FINANCIAL GEARING Definition

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FINANCIAL GEARING reflects any borrowing that the company may have undertaken. Operating income will become more volatile with increased financial gearing (borrowing). Thus the shares will have more risk attached to them. More borrowing, more risk. See GEARING and OPERATIONAL GEARING.

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COST REDUCTION is actions taken in the present designed to decrease costs in the present. See COST AVOIDANCE.

MARGINAL TAX RATE is the top rate of income tax that is charged to individuals on their earnings.

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