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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INDIFFERENCE POINT is that point on the indifference curve where the compared values intersect. See INDIFFERENCE CURVE.

3% RULE see THREE PERCENT RULE.

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