The GIGABYTE GA-EX58A-EXTREME was designed from the ground up to unleash the awesome power of the new Intel(R) Core(TM) i7 processors and is the industry's first motherboard to feature a cutting edge 24 phase power VRM design to deliver the smoothest power delivery for the CPU, giving extreme users unparalleled overclocking ability and the lowest temperatures to reach maximum performance levels.
<br /><br /> As the financial leverage increases, the risk to banks and other lenders increases because of the higher probability of bankruptcy. <br /><br /> As the financial leverage increases, the risk to stockholders increases because greater losses may be incurred if the company goes bankrupt. As the financial leverage increases, the risk to stockholders increases because the higher leverage will cause greater volatility in earnings and greater volatility in the stock price. As the financial leverage increases, the breakeven point of the company increases. The company now has to sell more of its product (or service) in order to break even. As the financial leverage increases, the risk to banks and other lenders increases because of the higher probability of bankruptcy. As the financial leverage increases, the risk to stockholders increases because greater losses may be incurred if the company goes bankrupt.
Financial leverage refers to the amount of debt in the capital structure of the business firm. If you can envision a balance sheet, financial leverage refers to the right-hand side of the balance sheet. Operating leverage refers to the left-hand side of the balance sheet - the plant and equipment side. Operating leverage determines the mix of fixed assets or plant and equipment used by the business firm. Financial leverage refers to how the firm will pay for it or how the operation will be financed. As discussed earlier in this article, the use of financial leverage, or debt, in financing a firm's operations, can really improve the firm's return on equity and earnings per share.