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.
Therefore, corporate management has an obligation to use a thorough and prudent process for establishing a companyâs target capital structure. The capital structure is how a firm finances its operations and growth by using different sources of funds. Empirical Use of Financial Leverage. Financial leverage is defined as the extent to which fixed-income securities and preferred stock are used in a companyâs capital structure. Financial leverage has value due to the interest tax shield that is afforded by the U.S. corporate income tax law.