Dear All
can anyone help me in computing the favourable and adverse leverage effect with explanations
Situation1
debt considered as debt good will is 14
if debt is considered as capital goodwill is 5
is it favourable or adverse
situation2
if debt is used as debt goodwill is 10
if debt is used as capital goodwill is (6.67)
Is it favourable oradverse?
In both cases its Favourable.
If you want to check more. Please check the video created by me. Below is the link
https://youtu.be/uqgiH0H4R08
Please let me know if you have any further doubts.
Murali and Sumeet Chartered Accountant
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