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CHAPTER ONE INTRODUCTION 1.1  BACKGROUND TO THE STUDY The term leverage is used to represent the proportionate relationship between debt and equity (Pandey, 2010). The concept used to study the effect of various mix of debt and equity on the shareholders return and the risk in the capital structure of a firm is known as leverage (Bhanu, 2011). Leverage is an investment strategy of using borrowed money to generate outsized ...

CHAPTER ONE INTRODUCTION 1.1 Background To The Study The leverage or Capital structure of a firm could be a combination of both debt and equity or by debt, or by equity. Consequently the capital structure of the firm has implications for the shareholders earnings and risk, which also affect the cost of capital and the market value of the firm. Capital structure centers on the mix of debt and equity ...