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The leverage of $1.77 means that $1.91 of assets is funded with $1 of equity and $.77 of debt.
What is leverage?
Leverage examines the financial structure of the company. Assets of the business were purchased using debt or equity. Leverage looks at the proportions. The more the Debt is, there is the higher the risk of bankruptcy. The more Equity, the higher the risk of take-over, at least for publicly held companies. Leverage definitions vary. Debt/Assets, Debt/Equity, and Assets/Equity are the three that are used the most frequently.
A leverage of 1.0 means no debt - every $1 of assets was paid for with $ 1of equity. Leverage of 2.0 means $ 2 of assets for every $ 1 of equity. 3.0 means $ 3 of assets for every $ 1 of equity, and therefore that the remaining $ 2 came from debt.
Therefore, the leverage of $1.77 means that $1.91 of assets is funded with $1 of equity and $.77 of debt.
Learn more about leverage at: https://brainly.com/question/27972889
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