FINANCIAL LEVERAGE Definition

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FINANCIAL LEVERAGE is the use of debt to increase the expected return on equity. Financial leverage is measured by the ratio of debt to debt plus equity.

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LEMONS AND PLUMS, in finance, LEMON is an investment with a poor or negative rate of return; and, PLUM is an investment with a healthy rate of return.

SPECIFIC IDENTIFICATION METHOD is an inventory costing method under which the actual cost of a particular item is assigned to that item; used for determining cost of goods sold.

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