The use of personal borrowing to change the overall amount of financial leverage to which an individual is exposed is called:
A) homemade leverage.
B) dividend recapture.
C) the weighted average cost of capital.
D) private debt placement.

Question

Quizplus · Accepted Answer

Homemade leverage refers to the process where individuals adjust their own financial leverage by borrowing or lending money on their own, rather than relying on the leverage provided by investments in companies. This allows individuals to alter their exposure to financial risk according to their personal risk tolerance.

The Use of Personal Borrowing to Change the Overall Amount