Leverage
Leverage is the use of borrowed money to supplement existing funds for purposes of investment.
Definition
According to Macroeconomics by Mankiw (7th edition),
- Leverage. The use of borrowed money to supplement existing funds for purposes of investment.
According to Managerial Accounting by Braun, Tietz (5th edition),
- Leverage. Earning more income on borrowed money than the related interest expense, thereby mcreasing the earnings for the owners of the business; also called trading on equity.
According to the HRBoK Guide,
- Leverage. The ability to multiply the return on an investment. The act of applying a small investment to bring a high level of return.