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Understanding Financial Leverage

Harvard Business Review

"Leverage" is one of the more interesting and difficult concepts to fully grasp in all of finance, but it's important for anyone that borrows or plans to borrow money to understand. The most intimate relationship most of us have with leverage is our home mortgage. Regardless, a financing component adds another fixed cost.

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Unlocking Financial Freedom with Personify Loans

Talent Anarchy 1

In an era of financial unpredictability, securing the right loan can be a game-changer. Whether you’re looking to fund your dream home, start a new business venture, or consolidate existing debts, the right loan can provide the financial leverage needed to achieve your goals.

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Research: CEOs with Diverse Networks Create Higher Firm Value

Harvard Business Review

For example, firms with better-connected CEOs can obtain cheaper financing , and firms with well-connected board directors see better performance. Our study , published in the Journal of Corporate Finance, found that CEOs with strong connections to people of different demographic backgrounds and skill sets create higher firm value.

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Stop Focusing on Profitability and Go for Growth

Harvard Business Review

So, in real terms, debt financing is essentially free. And the average long-term ROE is more than 25%, reflecting improved efficiency combined with greater reliance on financial leverage at most companies. And the after-tax cost of debt for many large companies is close to the rate of inflation.

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