Which type of gearing relates to the proportion of debt in the capital structure?
A) Financial gearing
B) Leveraged gearing
C) Operating gearing
D) Income gearing

Question

Quizplus · Accepted Answer

Financial gearing relates to the proportion of debt in the capital structure. Leveraged gearing refers to the use of borrowed funds to increase the potential return on investment, and operating gearing relates to the fixed and variable costs in a company's cost structure. Income gearing is not a commonly used term in finance.

Which Type of Gearing Relates to the Proportion of Debt