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Fin 400  Form

Fin 400 Form

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what's up everybody welcome back moving on with the capital structure chapter we're now going to be talking about homemade leverage in this video and to do a quick little review when we went over financial leverage the conclusion that we came to was that taking on debt taking on leverage for a company magnifies the gains and losses to shareholders basically makes the stock more volatile makes the shares more risky and because of that it would make sense for us to further conclude that capital structure decisions of a company are then important right because of the effect that financial leverage has to shareholders well this actually this statement is not necessarily true and that's what we're gonna go over in this video and the reason why it's not true is because shareholders can use something called homemade leverage to expose themselves to how much ever leverage they want to be exposed to no matter what the company is doing and more specificall

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