ABFM: Concepts and Practice · Part B: Advanced Financial Management
Chapter 8: Leverage and capital structure
How fixed costs magnify results: operating, financial and combined leverage, the EBIT-EPS choice, and how much a firm should borrow.
Buyers of the e-book, or of the print copy, which includes it, read the whole chapter. Everyone can read the free sample, pages 1 to 24 of the e-book.
In this chapter
- 8.1Leverage: the ideap. 101
- 8.2Operating leveragep. 102
- 8.3Financial leveragep. 103
- 8.4Combined leverage and EBIT-EPSp. 104
- 8.5Capital structure theoriesp. 105
- Exam traps and quick checksp. 106
- Practice: 16 questions in three roundsp. 107
- Answers, with every wrong option explainedp. 109
- Make it stickp. 111
- Chapter 8 on one pagep. 112
Corrections and updates
None for this chapter so far. Every correction to the book, and any rule that changes after its date, is listed on the errata page.