Leverage is a strategic choice made by management based on assessment of risk and potential positive cash flows and the availability of financing

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Leverage is a strategic choice made by management based on an assessment of risk and potential positive cash flows and the availability of financing. By using leverage, a company can increase the potential returns to shareholders. However, it also increases the risk of financial distress if the company is unable to meet its debt obligations. Management must carefully weigh the potential benefits and risks before making the decision to use leverage.

Leverage Is a Strategic Choice Made by Management Based on Assessment