Give an Example of How Leverage Can Be Used to Increase

question 23

Essay

Give an example of how leverage can be used to increase returns.

---

Definitions:

Business Combinations

Transactions or events in which one entity gains control over one or more other entities, often involving mergers and acquisitions.

Consolidated Income Statement

A financial document that aggregates the financial performance (revenues, expenses, profits) of a parent company and its subsidiaries.

Net Income

The total earnings of a company after all expenses and taxes have been deducted from revenue.

Voting Shares

Shares of stock that grant the holder the right to vote on company matters at shareholders' meetings.