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LSDefine

Simple English definitions for legal terms

capital leverage

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A quick definition of capital leverage:

Capital leverage is when a business borrows money to make more money. They use the borrowed money to invest in things that they think will make a profit. The goal is to make more money than they have to pay back in interest. This is called leverage. It's like using a ladder to reach something high up. The borrowed money is the ladder that helps the business reach higher profits. However, if the investments don't make enough money, the business may have trouble paying back the borrowed money and could end up in financial trouble.

A more thorough explanation:

Definition: Capital leverage refers to the use of borrowed funds by a business to earn a higher return than the interest rate paid on the borrowed funds. It is a financial strategy that aims to increase profits by using debt to finance investments.

  • A company borrows money from a bank to invest in a new project that is expected to generate a return of 15%. The interest rate on the loan is 8%. By using capital leverage, the company can earn a profit of 7% (15% - 8%) on the borrowed funds.
  • An individual investor buys stocks on margin, which means they borrow money from a broker to purchase more shares than they could with their own funds. If the stock price increases, the investor can earn a higher return than if they had only invested their own money. However, if the stock price decreases, the investor may lose more money than they would have without using capital leverage.

These examples illustrate how capital leverage can be used to increase returns on investments. However, it is important to note that using debt to finance investments also increases the risk of losses if the investments do not perform as expected. Therefore, capital leverage should be used carefully and with a thorough understanding of the risks involved.

capital lease | capital loss

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MIAMI A
[] AromaticTroubledDormouse
20:55
How does one know if they are UR1 or UR2?
[] AromaticTroubledDormouse
20:56
CONGRATS MACAQUE!
TY
got a random stanford email and almost had a heart attack
ALSO CONGRATS!
Congrats1!
21:15
Miami A, yall I'm so excited I could cry.
21:15
Feel like I can finally stop holding my breath!! Whew!!!
[] baddestbunny
22:16
every time I get accosted by a strange man who follows me around because my male coworkers were too busy talking to walk me back to my car I get closer to saying we need to bring back traditional gender roles
Dkk
22:32
Nice! @Macaque
Dkk
22:32
@Aromatic, Have to guess.
Dkk
22:33
That sucks @Bunny do you have to go to the hospital?
[] baddestbunny
22:40
I said accosted not assaulted
23:35
guys. my notre dame address just went long is this good or bad
1a2b3c4d26z
23:37
Oooooo me too
23:37
omg is this good or bad
Dkk
23:47
Idk if gender roles are gunna fix that then.
23:49
it looks like most people who applied in october last cycle didn't get a decision until january... does it even mean anything that our addresses went long??
hows ED 2 compared to ED 1?
Dkk
0:10
No idea
windyMagician
0:34
reporting live to say my ndls address also went long
does it mean anything ^
Dkk
2:21
NDLS and Fordham took a very long time last year. It's good info for people to know.
[] baddestbunny
4:29
let’s get after it boys and girls
Dkk
5:21
I gtg to bed soon.
Dkk
5:22
Big day today. Gunna be a crazy one. I will sleep through the first half.
good morning lsd it is 5 am EST
also jazzy my ndls address went long ages ago i sadly do not think it means anything
my stanford address also went long LOL i think at most it's an indicator it's under review
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