Optimum Leverage Ratio

Definition:

The borrowing level that maximizes the value of the firm. The cost of capital to the firm is minimized at that same level.

Investing Essentials


Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

Term of the Day

Interfund transactions

Financial arrangements effected by payments made from one fund group (either Federal funds or trust funds) to another group.

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