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It is true -Financial leverage depend upon fixes financial charges cause increase earning per share. It is use of company funds on which it pay limited return. Financial leverage use of fund obtain at a fixed financial charges in the hope of increasing the return to common stockholders......
Its a good question in fact i can say its a fundamental of finance: in general The degree of financial leverage depends on the size of debt in the capital structure. Financial leverage is synonymous with fixed-charges leverage in so far in financial fundamental Financial leverage is exists only when only points;1. the capital expenses comprises debt or other fixed cost capital and point2. or the ROI must not be equal to the percentage of interest or other fixed charges. ROI mean trust you got an idea now.
BR Nemani
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