|
In finance, leverage (sometimes referred to as gearing in the United Kingdom and Australia) is any technique to multiply gains and losses.〔Brigham, Eugene F., ''Fundamentals of Financial Management'' (1995).〕 Most often it involves buying more of an asset by using borrowed funds, with the belief that the income from the asset or asset price appreciation will be more than the cost of borrowing. Almost always this involves the risk that borrowing costs will be larger than the income from the asset, or that the value of the asset will fall, leading to incurred losses. ==Source== * Individuals leverage their savings when buying a home by financing a portion of the purchase price with mortgage debt. * Individuals leverage their exposure to financial investments by borrowing from their broker. * Securities like options and futures contracts are bets between parties where the principal is implicitly borrowed/lent at very short T-bill rates.〔Mock, E. J., R. E. Schultz, R. G. Schultz, and D. H. Shuckett, Basic Financial Management (1968).〕 * Equity owners of businesses leverage their investment by having the business borrow a portion of its needed financing. The more it borrows, the less equity it needs, so any profits or losses are shared among a smaller base and are proportionately larger as a result.〔Grunewald, Adolph E. and Erwin E. Nemmers, Basic Managerial Finance (1970).〕 * Businesses leverage their operations by using fixed cost inputs when revenues are expected to be variable. An increase in revenue will result in a larger increase in operating income. * Hedge funds may leverage their assets by financing a portion of their portfolios with the cash proceeds from the short sale of other positions. 抄文引用元・出典: フリー百科事典『 ウィキペディア（Wikipedia）』 ■ウィキペディアで「Leverage (finance)」の詳細全文を読む スポンサード リンク
|