Leverage effect

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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?

 

 

 

 

Replies (1)

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.

 


CCI Pro

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