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Lecture Corporate finance: A practical approach: Chapter 4 - CFA Institute

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Lecture Corporate finance: A practical approach: Chapter 4 - CFA Institute

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Leverage is the use of fixed costs relative to variable costs. Operating leverage pertains to the mix of fixed and variable costs of production. Financial leverage pertains to the capital structure (how the company finances its business). This chapter define and explain leverage, business risk, sales risk, operating risk, and financial risk and classify a risk, given a description.

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