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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ABNORMAL RETURNS is the difference between the actual return and that is expected to result from market movements (normal return).

ROBUST is when a business is considered fully developed and healthy.

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